Ghana, China Sign $3B Deal for O&G Sector

LAGOS (Dow Jones Newswires), Sep. 23, 2010

Ghana and China have signed deals totaling $15 billion during a five-day state visit to Beijing by Ghana President John Atta Mills, signaling the west African country's rising prominence as an investment destination and future oil producer.

The China Exim Bank and the government of Ghana on Wednesday signed a $10.4 billion concessionary loan agreement for infrastructure projects, payable over 20 years, the government of Ghana said on its website. The loan is subject to approval by the Ghanaian parliament and cabinet.

A separate loan of $3 billion, from the China Development Bank, is slated for Ghana's burgeoning oil and gas sector. Ghana is set to begin oil production later this year and will soon pump 120,000 barrels a day, according to government and oil company estimates. The China Development Bank also guaranteed more than $400 million for water and e-governance projects in Ghana, according to the government website.

Ghana's deputy minister of finance and economic planning, Seth Tekpeh, confirmed the loans.

"The repayment for these loans would not come from the budget but through exports," Mr. Tekpeh said in a telephone interview with Dow Jones Newswires.

Separately, Ghana signed an agreement worth $1.2 billion with Chinese firm Bosai Minerals Group to build a bauxite and aluminum refinery in Ghana over four years, according to several Ghanaian newspapers. Bosai Minerals would purchase 80 percent of the shares in Ghana Bauxite Company Ltd., according to the newspapers.

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