China Eximbank provides $199.4 million preferential buyer’s credit for Phase 2 of Integrated National Security Communications Enhancement Network (ALPHA) Project

China Eximbank provides $199.4 million preferential buyer’s credit for Phase 2 of Integrated National Security Communications Enhancement Network (ALPHA) Project On December 4, 2019, China Eximbank and the Government of Ghana’s Ministry of Finance signed a $199,413,626.10 preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK PBC NO. (2019) 12 TOTAL NO. (495)] for Phase 2 of the Integrated National Security Communications Enhancement Network (ALPHA) Project.

The PBC was approved by the Ghana’s Cabinet on October 30, 2019 and Ghana’s Parliament on November 18, 2019.

The proceeds of the PBC are to be used by the borrower to finance 85% of the cost of a $234,604,266.00 commercial contract between Ghana’s Ministry of National Security, Huawei Technologies Co., Ltd., and China Machinery Engineering Corporation (CMEC), which was signed on on December 5, 2018.

According to the Government of Ghana’s Development Cooperation Management Information System (Gh-DCMIS), as of May 2022, the $199,413,626.10 loan (PBC) achieved a 85.6% disbursement rate, with China Eximbank making 10 loan disbursements (worth $170,828,621.44) between 2020 and 2022: a $9,131,598.30 disbursement on June 30, 2020, a $14,328,828.30 disbursement on June 30, 2020, a $32,812,908.66 disbursement on July 7, 2020, a $10,494,000.00 disbursement on December 23, 2020, a $10,852,912.32 disbursement on August 13, 2021, a $29,267,962.57 disbursement on August 17, 2021, a $11,568,361.29 disbursement on December 8, 2021, a $32,669,160.15 disbursement on December 23, 2021, and a $8,244,954.15 disbursement on December 28, 2021, and a $11,457,935.70 disbursement on June 30, 2022.

The loan’s (principal) amount outstanding was GHS 570,480,000 ($101,871,428) as of December 31, 2020 and GHS 956,100,000 ($183,865,384) as of December 31, 2021.

By May 2022, the loan’s grace period had not yet expired and its total amount outstanding (including principal and amortized interest) was $170,828,621.44.

The Government of Ghana’s Ministry of Finance and Barclay’s Bank of Ghana Limited also signed a $35.5 million loan agreement for Phase 2 of the Integrated National Security Communications Enhancement Network (ALPHA) Project.

The main objectives of the project are as follows: (a) improve communications network coverage from its patchy status to nationwide coverage; (b) increase CCTV cameras from current 800 to around 10,000, with the introduction of additional sensors for effective law enforcement, border security and attendance to other pertinent national security related matters; (c) provide a dedicated backbone big data network for secure intelligence dissemination; (d) build a backup national Command Centre and data centre for incident coordination and secure storage; (e) modernize the command and operations centers of stakeholder institutions to align with the national Command center and; (f) provide additional handset terminals for use by law enforcement, security and intelligence agencies.

The main components of the project include (1) an expansion of a video monitoring system (deploying video monitoring cameras to more cities since Phase 1 mainly deployed in Accra); (2) an expansion of an eLTE network (since the existing network only covers major cities); (3) microwave transmission (to solve the problem of the eLTE network transmitting back to the center); (4) capacity expansion of the Automatic Number Plate Recognition (ANPR at high-speed intersections and main roads to capture and record vehicles violating the regulations; (5) a video transmission network (including a metropolitan area network and access network); (6) an intelligent video analysis system (such as video abstraction, behavior analysis, blacklist detection); and (7) data center expansion (including an expansion of the existing Accra data center to support the deployment of additional equipment and the construction of a new data center for back up purposes in Kumasi).

Huawei Technologies Co., Ltd. and China Machinery Engineering Corporation (CMEC) are the contractor responsible for implementation.

Project implementation commenced in January 2020 and the project was originally expected to reach completion in 18 months (July 2021). However, logistical challenges related to the Covid-19 pandemic led to project implementation delays. The project is now scheduled to reach completion in December 2021.

To date, 6,500 cameras has been installed, and more than over 4,000 cameras are powered and online (mainly in Accra, Kumasi and other regional capitals).

Albert Kan-Dapaah, the Minister of National Security, told the country’s parliament that ‘[t]his installation has aided us to detect many infractions and criminal activities, including helping us solve recent violent crimes such as armed robbery and kidnapping.' As of February 2024, the project was 'substantially completed,' but China Eximbank suspended the project in 2023 due to the Government of Ghana's suspension of loan repayments.

There are some indications that the China Eximbank loan for Phase 2 of the Integrated National Security Communications Enhancement Network (ALPHA) Project may be financially underperforming vis-a-vis the original expectations of the lender.

According to the World Bank’s International Development Statistics, the Government of Ghana had accumulated principal and interest arrears to one or more official sector Chinese creditors worth $908,337,346.70) in 2020 ($763,228,526.60 in principal arrears and $145,108,820.10 in interest arrears).

There are some indications that the China Eximbank loan for Phase 1 of the Kpong Water Expansion Supply Project may have financially underperformed vis-a-vis the original expectations of the lender.

According to the World Bank’s International Development Statistics, the Government of Ghana had accumulated principal and interest arrears to one or more official sector Chinese creditors worth $908,337,346.70) in 2020 ($763,228,526.60 in principal arrears and $145,108,820.10 in interest arrears).

Then, on December 19, 2022, the Government of Ghana announced a sovereign default, suspending debt service on its Eurobonds, its commercial loans, and most of its bilateral loans.

The Government of Ghana suspended debt service to China Eximbank for Phase 2 of Integrated National Security Communications Enhancement Network (ALPHA) Project in 2023.