Ghana signs $10bn MOU with China for bauxite project

…Constitutes 8 man committee to investigate contaminated fuel

Ghanaian Senior Minister, Yaw Osafo-Maafo said on Wednesday that the West African country, has signed a $10 billion memorandum of understanding (MOU) with China to develop the country’s bauxite industry.

The funds from Beijing would contribute toward building 1,400 km of a planned 4,000 km railway network, which would connect bauxite mines and production sites as well as establish a rail link into neighboring Burkina Faso.

Details such as interest rates and terms had yet to be decided, he said, speaking on the sidelines of an investor conference organized by Developing Market Associates.

During the minister’s China visit, a second MOU was signed between China and the Association of Ghana Industries which could lead to some $2 billion being invested in agricultural projects and industries, Osafo-Maafo said.

Taking office in January, President Nana Akufo-Addo has outlined a program of job creation through the private sector and rural development.

“To develop the bauxite project with its railway and converting bauxite into aluminum we will need about $10 billion … we signed an MOU,” Osafo-Maafo told reporters at a conference in London after arriving from China.

“The money will come from the Chinese Development Bank, the implementation of the project will come from other agencies, infrastructure agencies in China, like China Railway,” he said.

Asked about the government’s plan to issue a 10 billion cedi ($2.25 billion) bond, Osafo-Maafo said he expected the debt to be issued toward the end of the year, and with maturities ranging from 5-15 years.

Earlier in June, Ghana had named Standard Chartered Bank and local lender Fidelity as lead managers for the issue expected to clear debts owed by public sector energy utilities.

Meanwhile, Ghanaian ministry of Energy has initiated steps to investigate the purported release of five million litres of contaminated fuel onto the market by the Bulk Oil Storage and Transportation Company (BOST).

A statement released Wednesday and signed by the Energy Minister, Boakye Agyarko said the Ministry is in the process of setting up an eight-member investigate committee into the matter.