Senate to Ratify US$35M Loan Agreement

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A loan agreement in the amount of US$35 million for the Mano River Union (MRU) Road Development and Transport Program (MRU/RDTFP) has been sent to the Senate for ratification.

According to a letter from President Ellen Johnson Sirleaf dated July 14, the loan agreement signed between the government and the African Development Fund, is meant to provide additional funds for the foreign currency and part of the local currency costs of the program.

President Sirleaf said the program is a multinational project involving three countries, La Cote d’Ivoire, Guinea and Liberia, adding that, “The executing agencies under the loan agreement are the Ministry of Public Works and the Economic Community of West African States (ECOWAS) in consultation with the MRU General Secretariat.”

Regarding the breakdown of the loan, President Sirleaf said the maximum commitment charge rate payable by the government on the undisbursed portion of the loan “shall begin to accrue 120 days after the date of the signature of this agreement and shall be one half of one percent (0.5 percent) per annum, while the service charge payable on the principal amount of the loan disbursed and outstanding amount shall be three quarters of one per cent (0.75) per annum; while payment dates are April 15 or October 15 in each year.”

The terms of the agreement, according to the letter before Senate plenary, is a period of 30 years after a 10 year grace period commencing from the date of the agreement, at the rate of two percent of the principal per annum from the 11th to the 20th year inclusive and at the rate of four percent of the principal per annum thereafter.

In a related development, the Senate yesterday voted unanimously to concur with the House of Representatives in ratifying a loan agreement between Liberia and the OPEC Fund for International Development (OFID), which will be used for upgrading the Gbarnga-Salayea Road.

In a separate letter also received by the Senate, President Sirleaf submitted for ratification an instrument called, “The Consolidated Lease and Management Agreement for the Liberia Petroleum Refining Company (LPRC) Crude Storage Facility” between the LPRC and Conex Petroleum

Group Incorporated, entered into on the February 27, 2014.

According to President Sirleaf, the LPRC has leased her rights within the parameters of the National Port Authority (NPA), where it has a crude storage terminal, but that the “facility has not been operational and has been dormant due to corrosion, long years of civil conflicts and other factors for about three decades.”

Under the agreement, LPRC leased to Conex Petroleum Group the LPRC Crude Storage Terminal (CST) on a “as is where is” basis; and the agreement is for a 20 year period certain with an option for extension for additional 20 years under terms and conditions to be agreed upon. “Conex Petroleum is to rehabilitate, refurbish, upgrade and reconstruct the Crude Storage Facility.”

“In view of government’s commitment to promote private sector participation for maximum productivity and revenue generation, I request your timely ratification…” the President wrote.

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