The Plenary of the House of Representatives has mandated its Committees on Ways, Means, Finance and Development Planning, Judiciary and Public Works to review two Loan (Financing) Agreements, submitted by President Ellen Johnson-Sirleaf to the tone of US$80 million.
The money is intended for road construction and expansion of electricity project.
The loan agreements which are subject to ratification were signed between the Liberian government and the International Development Association (IDA); the Liberian government and the OPEC Fund for International Development (OFID) in the amounts of US$60 million and US$20 million respectively.
The purpose of the US$60 million loan is to generate additional financing for the implementation of the Liberia Accelerated Electricity Expansion Project, which when completed, will increase access to electricity and strengthen the Liberia Electricity Corporation (LEC) capacity.
According to the President’s communication, the Maximum Commitment Charge Rate payable by the government on the Withdrawn Financial Balance is one-half of one percent (1/2 of 1%) per annum, while the service charge payable on the Withdrawn Credit Balance shall be three-fourth of one percent (3/4 of 1%) per annum. Payment dates are May 15 and November 15 in each year as of the day it shall be ratified by Legislature.
“The Term of this Financing Agreement is 38 years including a six-year grace period. Repayment of the principal amount of the loan shall be made in accordance with the repayment schedule set forth in Schedule to this Financing Agreement,” Madam President said in her communication.
As for the US$20 million Loan Agreement, it is intended to upgrade the Gbarnga-Salayea-road which will contribute to the economic and social development of Liberia.
The President told the lawmakers in her letter that the Liberian government shall pay interest at the rate of one percent per annum of the principle amount of the Loan withdrawn and outstanding, and a service charge at the rate of one percent on the principle amount of the Loan. Interest and Service Charges shall be paid semi-annually on March 15 and September 15 in each year into OFID Account.
“The term of this Loan Agreement is 20 years, including five-year grace period. Repayment of the principle amount shall be effected in 30 semi-annual installments in the amounts and on the dates specified in Schedule to repay Loan Agreement,” the letter noted.
“Mr. Speaker, in view of the important purpose of this loan arrangement and the need to develop, expand and integrate Liberia’s road network thereby reducing travel time and cost, and ultimately improve the standard of living of the inhabitants of Bong and Lofa Counties, I ask your ratification of this instrument,” the President wrote.
Meanwhile, the Joint Committee, chaired by Lofa County Representative Moses Y. Kollie, is expected to evaluate and advise Plenary on the Loan Agreements to make an impactful and effectual decision. The Kollie Committee is expected to report to Plenary on Tuesday, April 12.
The Committee was set-up owing to a motion from Lofa County lawmaker, Mariamu Fofana on Tuesday, April 5, during the 18th day sitting of the 5th Session.
Rep. Kollie told reporters that a review of the two loans will not be overlooked or overemphasized, because two of the many challenges in restructuring the country’s infrastructure are the access to electricity and the construction of roads.