China Development Bank provides $150 million loan for ICT Enhanced Surveillance Project (Linked to Project ID#2034, #58586, #86361, and #85282)

On December 16, 2011, China Development Bank and the Government of Ghana signed a $3 billion master facility agreement (captured via Project ID#2034). This agreement established two lending facilities: Tranche A and Tranche B. Tranche A is a $1.5 billion facility and any borrowings through this facility are undertaken with a 15 year maturity, 5 year grace period, an interest rate of 6-month LIBOR plus a 2.95% margin, a 0.25% upfront fee, and a 1% commitment fee. Tranche B is a $1.5 billion facility and any borrowings through this facility are undertaken with a 10 year maturity, 3 year grace period, an interest rate of 6-month LIBOR plus a 2.85% margin, and a 1% commitment fee. Both tranches are collateralized against cash proceeds from the sale of crude oil from the Jubilee field, which the borrower was required to deposit in a debt service reserve account (DSRA). The cash balance of the DSRA was GHS 370,586,909 ($71,266,713) in 2019. [Note: A requirement of the master facility agreement was that the Ghana National Petroleum Corporation (GNPC) and the China International United Petroleum and Chemicals Co. (UNIPEC Asia) sign an offtaker for the sale and purchase of crude oil. Under the terms of this agreement, GNPC agreed to supply and sell 13,000 barrels of crude oil from Jubilee Field each day to UNIPEC Asia over a 15.5 year period. The proceeds from these oil sales were then deposited into a special account to facilitate loan repayment and provide a source of collateral.] Under the terms of the master facility agreement, subsidiary loan agreements must be negotiated to secure financial support for any given project. Tranche A is captured via Project ID#2034, and Tranche B is captured via Project ID#58586. In April 2013, China Development Bank and the Government of Ghana signed a subsidiary loan agreement worth $150 million — using the Tranche B lending facility — for the ICT Enhanced Surveillance Project. The proceeds of this loan were to be used by the borrower to finance approximately 85% of the cost of a $176.5 million commercial contract between Huawei Technologies Co., Ltd., which was signed in 2012. The purpose of the project was to build an integrated national security communication network with an encrypted PTT dispatching system, high speed mobile internet access, intranet VPN dedicated service, and national mobile video surveillance and emergency control and command services. The network has give main components: eLTE Broadband Video Trunking, Intelligent Video Surveillance, Emergency Command Centre, Data Center, and Emergency Communications Vehicle. The ultimate objectives of the integrated national security communication network were to establish an emergency response and disaster relief mechanism for the Government of Ghana; provide extensive voice coverage and video surveillance for security sensitive areas; and co-ordinate national resources to deal with the threats posed to national security. Another component of the project involved the deployment of a helicopter fleet for aerial surveillance and monitoring of gas infrastructure/facilities. More specifically, this component involved the acquisition of four Z-9EH helicopters as part of an enhanced ICT surveillance system to support the Western Corridor Gas Infrastructure Development Project (see Project ID#58586). It also involved the provision of spare parts and facilities for the aircraft and their maintenance, as well as personnel training. The President of Ghana announced that the helicopters would be used to secure offshore oil installations, enhance maritime security and anti-piracy efforts, conduct medical evacuations, and conduct search and rescue operations. Huawei Technologies Co., Ltd. was the general EPC contractor responsible for implementation. However, China National Aero Technology Import and Export Corporation (CATIC) was involved in the provision of the four Z-9EH helicopters. The project officially commenced in 2012. CATIC successfully delivered all four helicopters to Ghana Air Force on September 23, 2015. The project was ultimately completed in 2017. It reportedly resulted in the installation of approximately 800 CCTV cameras in Accra, Kumasi, Takoradi and some critical border areas such as Aflao, Elubo and Paga, as well as other critical national installations and some major towns across the country. It also and the establishment of a national Emergency Command Center (or ‘National Command Centre’) other operations centers for emergency response and command and control for law enforcement, security, intelligence, and emergency response agencies. According to Ghana’s Minister of National Security, Mr Albert Kan-Dapaah, “[the] project was largely successful, enhancing the communications of the various agencies and assisting to detect crime, road infractions, supporting major public events and providing evidence to support investigations and the prosecution of many cases where some details were captured by the CCTV network.’ According to Ghana’s Ministry of Finance and Economic Planning, as of November 2018, the $150 million CDB loan for this project had fully disbursed.

Additional details

1. This project is also known as the Integrated National Security Communications Enhancement Project, Phase 1 of Integrated National Security Communications Enhancement Network (ALPHA) Project, the ICT-enhanced Surveillance and Monitoring Facilities for the Oil and Gas Enclave Project, and the Deployment of ICT Enhanced Surveillance Platform for Western Corridor Oil Enclave Project. The Chinese project title is 的油气监控通讯技术平台项目 or 综合国家安全通信增强项目. 2. On October 31, 2019, Ken Ofori-Atta, Ghana’s Minister of Finance, and Albert Kan-Dapaah, Ghana’s Minister of National Security, submitted a joint memorandum to the country’s parliament to justify approval of a $199.4 million preferential buyer’s credit from China Eximbank for Phase 2 of Integrated National Security Communications Enhancement Network (ALPHA) Project (captured via Project ID#86361). It said that ‘the Government of Ghana (GoG) in its efforts to improve the security of the state intends to enter into an agreement to leverage emerging technologies to facilitate the determent and detection of nefarious activities in the country, safeguard critical national infrastructure and also to improve security and emergency response coordination with the use of state-of-the-art security and public safety systems. To this end, the GoG and Huawei Technologies signed a $176 million commercial contract in 2012, to deliver such mentioned systems, to complement other security systems already in place nationwide. Funding was provided by China Development Bank and all necessary parliamentary approvals were secured through the Ministry of Communication. The National Security Council as part of its mandate was the owner of the project and provided the key personnel on behalf of the GoG to support project implementation and subsequent takeover for operations and maintenance. The first phase of the project as currently deployed provided the underlying infrastructure for national security and emergency response priority communications for both voice and data, as well as the backbone for our nationwide video surveillance (CCTV) deployment efforts. It further delivered a national Emergency Command Center, for coordinated incident response, and from which the various security services are able to draw intelligence feeds. For the reasons, the Ghanaian President granted executive approval on October 30, 2019 for the implementation of the second phase of the project. The first phase of the project installed the communications network upon which network elements such as the CCTV, handsets, and other systems would ride. It also introduced a few of the CCTV cameras (around 800 cameras) for priority deployment to critical areas such as key national installations and hotspots. However, these numbers have been found to be woefully inadequate in providing anything close to effective coverage for our nation’s security. Recent violent crimes and other security breaches for which we were unable to provide active surveillance, nor provide post-incident video footages, have necessitated expeditious action to extend the coverage of the systems to cover dead zones and some hot blind spots in the country.’ This statement suggest that China Development Bank rather than China Eximbank issued a loan for Phase 2 of Dedicated Security Information System Project (also known as Phase 1 of Integrated National Security Communications Enhancement Network Project). However, AidData has not independently confirmed that China Development Bank issued a loan to support this project.” 3. AidData has calculated the all-in interest rate (3.286%) by taking the average 6-month LIBOR rate during the month (April 2013) when the subsidiary loan agreement was finalized (0.436%) and adding a 2.85% margin. 4. The DSRA cash balance in 2019 is drawn from https://www.ifac.org/_flysystem/azure-private/Ghana-financial-statements.pdf. The USD value of the cash balance is calculated by apply the average GHS-to-USD (5.9-to-1) exchange rate in calendar year 2019.

Number of official sources

11

Number of total sources

23