China Eximbank approves and then cancels $95 million loan for Digital Migration Project (DTT)

On April 11, 2012, the Government of Ghana signed a commercial contract with the StarTimes DTV Ghana Company Ltd. to supply and install the Digital Terrestrial Television (DTT) network platform. As part of its financing proposal to the Government of Ghana, StarTimes DTV Ghana Company Ltd. submitted a letter of intent from China Development Bank. However, StarTimes DTV Ghana Company Ltd. later proposed a concessional loan facility with China Eximbank. In 2012, China Eximbank agreed in principle to finance Ghana Digital Migration Project (DTT). The purpose of this project would be to help Ghana migrate from an analogue to digital terrestrial platform. StarTimes Ghana later assigned its interest to StarTimes China because it was a necessary condition for funding from the China Eximbank, and after six months of delays, the contract was assigned to StarTimes China on September 27, 2012. Then, on April 16, 2015, China Eximbank signed a $95 million concessional loan agreement with Ghana’s Ministry of Communication for the Ghana Digital Migration Project (DTT). This loan carried the following terms: an interest rate of 2 percent, a grace period of 5 years, and a maturity of 15 years. However, due to allegedly fraudulent behavior by StarTimes China, the Government of Ghana sought to cancel its commercial contract with the company. StarTimes China then filed a writ in Ghana against the decision and applied for an injunction to restrain the Ministry of Communications from inviting new tenders for the DTT Project. On March 9, 2015, the Commercial Division of Ghana’s High Court dismissed the interlocutory injunction and awarded cost a $50,000 judgment against StarTimes. Startimes China then commenced arbitration proceedings against Ghana’s Ministry of Communications at the International Chamber of Commerce (ICC) Court of Arbitration in London. The ICC upheld the rights of Ghana’s Ministry of Communications to terminate its contract with StarTimes China on February 22, 2017, and ruled that StarTimes China could only be entitled to compensation based on work done. After the contract was terminated, another competitive tender was instituted in which StarTimes China refused to participate. KNET, a Ghanaian company won the bid, and in 2016 it completed more than half of the DTT Project. China Eximbank cancelled the loan facility for the DTT Project on May 11, 2018.

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