3 loan agreements signed

Germany is extending 40.82 million euros, approximately GHC176 million  to support the country’s renewable energy agenda, and to strengthen financial management capacities of the Ghana Revenue Authority and the Ghana Audit Service.
 

Three different loan agreements to that effect were signed between government representatives of the two countries in Accra. 

The Finance Minister, Mr. Seth Terkper, signed on behalf of Ghana, with the German Ambassador to Ghana, Mr. Christoph Retzlaff signing on behalf of the Federal Republic of Germany.

Other personalities present at the ceremony were the Deputy Minister of Finance Mrs. Mona Quartey, the Auditor General, Mr. Richard Quartey, the Commissioner-General of GRA, Mr. George Blankson, the CEO of the Volta River Authority, Mr. Kirk Cofie and the Chief Director of the Ministry of Power, Mr. Solomon Asoalla.

Also present was the Director of KfW Ghana, Mrs. Birte Schorlemmer. KfW Development Bank is Germany’s leading development bank which carries out Germany’s Financial Cooperation (FC) with developing countries on behalf of its government. For more than 50 years, it has been an important partner supporting the development of a vibrant Ghanaian economy. 

Speaking before the official signing ceremony, Mrs. Quartey explained that the first agreement provides a 22.82 million euros soft loan, approximately GHC 98 million for a 12 megawatt solar power plant in the Upper West Region. 

With this programme, she said, Germany will supports the country to increase the use of renewable energy which will help to become more independent from fossil energy and to make use of one of its greatest natural resources – the sun. 

The new solar plant will provide an additional energy source which is reliable, cost-effective and ecologically sound.

 “Not only the Upper West Region will benefit from the additional energy and economic development, but households and small business such as dress makers, farmers and food vendors all over the country. A reliable energy supply will support the country on its way towards a middle income country, reduces poverty and promotes its businesses to compete internationally at fair conditions,” she stated.

The government has recognised the need for renewable energy and has set a goal of a 10% renewable energy share in its total energy mix. This 12 megawatt solar power plant will contribute in achieving this goal, she said.

Mrs Quartey explained that the solar plant project to be implemented in conjunction with Volta River Authority, will contribute towards the diversification of electricity generation mix will help the country to reduce its emission of greenhouse gases and defend climate change with all its severe consequences. 

The second loan agreement, totaling 13 million euros, approximately GHC 56 million is also targeted at increasing the performance of the Ghana Audit Service (GAS).

The GAS is an independent Supreme Audit Institution that audits both government-funded as well as development partner-funded projects plays a significant role in ensuring that all financial resources are fully spent for the purpose of planned programmes and development activities. 

However, GAS is currently not able to perform all these tasks due to the lack of appropriate office space. 

This, the German government has agreed with the government to construct 25 district and regional offices for GAS. By this, both partners aim to strengthen transparency, accountability and probity in Ghana’s public financial management system – to reassure to the Ghanaian people that all resources are spent for the good of the country.

The third loan agreement also totaling 5 million euros, approximately GHC 21.5 million, will be channeled towards supporting the Ghana Revenue Authority (GRA) in constructing an Information Technology (IT) Training Institute.

This is aimed at ensuring that the GRA mobilises revenues through the use of modern technology and the promotion of compliance, as it is currently facing a number of challenges.

This challenge include low levels of compliance, a large volume of manual processes and poorly maintained infrastructure. 

The German Development Cooperation finances an IT Training Center for GRA in Accra, will help to strengthen the operational capacity of the authority, that also supports organisational change, business process modernisation and the implementation of new IT applications. 

This will not only substantially increase revenue through the reduction of administrative and tax compliance costs, but also will improve service delivery for all Ghanaian taxpayers. Apart from the construction of the center, all needed equipment as well as training for staff and coaches will be part of the loan. 

Mr. Terkper recounted the long-standing relationship between the two countries, and commended Germany for generous contributions towards Ghana’s development.

He observed KfW’s assistance towards the country’s establishment of the EXIM Bank, using some of its models which had worked for it.

Ambassador Retzlaff lauded the Ghana-Germany ties, which he said had been deepened over the past years.

Mrs. Schorlemmer said the financing agreement was “in line with its commitment over the years to support the Ghanaian government to develop a vibrant and prosperous economy.”