Ghana Parliament Approves $3 Billion Chinese Loan

Ghana's parliament on Friday approved a $3 billion Chinese loan and the country's finance minister said the west African nation was in talks with China's Exim bank for loans worth another $6 billion, which are part of a broader Chinese package.

The money is part of a total $13 billion in agreements signed in September 2010 between Ghana and the China Development Bank and China Exim Bank aimed at developing infrastructure projects, including in the oil and gas sector.

Doe Adzaho, deputy speaker of Ghana's parliament, said the bill was approved by acclamation, so no vote was needed.

We have started the negotiations (on the $6 billion loan) and it's going well, finance minister Kwabena Duffuor said, adding that the details will be put before parliament after work is completed on the current $3 billion facility.

Duffuor said the loans are among the biggest so far contracted by Ghana, but are comparatively cheaper than floating a Eurobond.

A parliament report seen by Reuters on Wednesday said Ghana will repay the $3 billion loan at an interest rate of six-month Libor plus 2.95 percent. It will also pay an upfront fee of 0.25 percent and commitment fees of 1 percent per year.

Ghana, the world's second largest cocoa grower, became the continent's newest oil producer when it started pumping oil from its Jubilee field in December last year.

Ghana has said it plans to use the money to finance infrastructure projects and transform its economy through gas- and oil-driven industrialisation.