Spain has signed a 60 million euro loan agreement with Ghana, out of which 8 million will be used for the supply of equipment to the Ghana Police Service and 2 million euros for communication gadgets to the Ghana Immigration Service.
An amount of 5 million euros will also be allocated to the Ministry of Energy for the provision of Off-Grid Solar Electrification.
The rest of the money will go into funding several projects including the rehabilitation and expansion of the Damongo, Water Supply Project, the supply of components for the construction of steel bridges in several parts of the country, and supply and installation of equipment for the national hospital network project among others.
Under the agreement the Spanish government has decided to convert the amount allocated to the Police Service under the Ministry of Interior and the amount allocated to the Ministry of Energy into a grant.
“This”, the Spanish Ambassador to Ghana, Mrs. Julio Olmo said, “has reduced the loan component of the facility to about 47 million euros and increased the grant component to 18 million euros.”
She stated this at the signing of the Debt Swap for Development Programme and grant agreement between Ghana and Spain in Accra.
Referring to the Debt Swap for Development Programme, the Ambassador explained that the “programme between the Spanish Ministry of Economy and the Ghanaian Ministry of Finance and Economic Planning, allows the debt obligations of Ghana towards Spain to be transformed into investment projects which will impact on the economic and human development of Ghana”.
She continued that the agreement will write off the debt contract by Ghana before December 31, 2003. The total amount of debt relief, including principal and interests, will be $44 million.
The debt swap mechanism, she emphasized, will imply that the debt service affected by the cancellation will be deposited by Ghana in a Ghanaian-Spanish Trust Fund.
“When the amount disbursed by Ghana in the Fund reaches 40 percent of the principal of the debt cancellation, the Ghanaian obligation to feed the Fund will terminate.
The freed-up resources directed to the Ghanaian-Spanish Fund will be assigned to finance investment and development projects in Ghana, implemented by Spanish and/or Ghanaian companies.”
The Minister for Finance and Economic Planning, Dr. Kwabena Duffuor stated that the debt swap facility will contribute to the socio-economic development of Ghana.
“This instrument will allow the debt obligations of Ghana towards Spain to be transformed into investment projects which will impact on the economic and human development of the people of Ghana,” he added.
He expressed government's profound gratitude to the Government of Spain “for their invaluable support to our nation's development over the years”.
He promised the resources will be used for the purpose for which they have been provided.
By Esther Awuah
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