Download The Governments of the Republic of Ghana (Ghana) and the

RULES FOR THE OEBT SWAP FOR OEVELOPMENT PROGRAM BETWEEN THE
REPUBLlC OF GHANA ANO THE KINGOOM OF SPAIN
The Government s of the Republ ic of Ghana (Ghana) and the Kingdom of Spain
(Spain) have signed a debt swap ter public investments program (the Program) , in
Madrid. on May 8th 2009 and in Acera on June zs" 2009. This Program amounts to
US$44 ,364,177.05.
The Debt Swap Mecha nism implies tha t 40% of the service of the debt due by Ghana
to Spain and included in the Program will be deposited in a Trust Fund (the Fund)
created for thal purpose . Particul arly, the Ghanaian Govemment wil1 deposit in the
Fund , in local currency (the cedi-GHC·), the exchange value of USS2D,471 .591.7D.
according lo the schedule specified in the An nex 2 af the Program o
The debt relief agreed in Ihe fram ework af th e Debt Swap Program is aimed lo achieve
the 90al5 included in the Program o This set of rules aims to desc ribe the practical
functioning of the Programo
ARTICLE I
BI-NATlONAL COMMITTEE
In application of the debt swap program article 4.1.Ghana and Spain (the Parties)
commit to create a joint committee (the Bi-national Committee) that will be in charge of
defining the policy to manage the resources deposited in the Fund .
This Bi-national Committee will be integrated by four representatives . two trom the
Ghanaian Government and two from the Spanish Govemment. In particular. trom the
Ghanaian side. it will be integrated by the Director 01 Legal Affairs 01 the Ghanaian
Ministry 01 Finance and Economic Planning and the head 01 the Spain Desk 01 the
Ghanaian Ministry 01 Finance and Economic Planning . On the Spanish side it will be
integrated by the Deputy Director General lar the International Financial System 01 the
Spanish Ministry 01 Economy and Finance and the Econom ic and Commercial
Counsellor 01the Spanish Embassy in Ghana.
AR TICLE 11
THE BI -NATIONAL COMMITTEE FUNCTIONING ANO ATTRIBUTIONS
The management 01 the Program is done by the Bi-naticnal Cc mmittee which is in
charge 01 taking al! the managing decisions related to the lunds stemming from the
Program o
The lun ctioning 01the Bi-national Committee will 101l0w these guidelines :
11.1 The Bi-national Committee will take all its decislon s by consensus
11.2 The Bi-national Ccmmittee wilJ meet in the presence 01 all its members. In case
that any 01 the members shatl not be able to attend, the Party concerned may
designate another representativa and communicate in writ ing to the other Party the
name and position 01 the alorementioned representativa.
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11.3. The Bi-natio nal Committee meeting s will be held in Ghana, in Spain or in any
ot her thi rd country considered appropriate by the Si-nati onal Committee. The host
cou ntry wi ll act as chair and secretariat of the Bi-national Co m mittee.
11.4 The Bi- natio na l Com mittee will meet, at least , once ayea r and w henever it rs
nec essary for the corre ct development of its function s.
11.5 AlI meetings cf the Bi-national Committee will be registered in Ag reed Minutes by
th e secretariat . which will compile all the decisions taken durin g the meetin g. These
Minutes w ill be signed by each Com mittee member attend ing the meetin g.
11.6 In case that one decision must be taken before the celebration of a Comm ittee , th is
decisión should be validated by the circulation of an exp lanatory docu me nt (in the form
of Min utes) to be signed by each member of the Bi-national Co mmittee . Thi s decisión
w ill have the same legal validity as any other measure adopted durin g a formal mee ting
of the Bi-national Committee.
11. 7 The Bi-national Committee will be also in charge o f the foll ow ing attr ibutions:
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The definitio n of the priorities and the appropriate poli cy for t he use of t he Fund
resources and the adoption of whatever agre ements need to be reach ed in order to
achieve an efflcient performance of the Prog ram olt wi1l also decide on the ñnancia l
manageme nt of the Fund , following up all the disburseme nt to the Fund and the
payments made by the Fund.
The co nstit ut ion of the Technical Committee according to th eses rules.
The study of the reports and proposals sent by the Techni cal Co mmittee .
The approval, rejection or modification of the prop osals of projec ts to be financed
with the Fund resource s.
The approval of the assessment reports and the inde pende nt audits to be held.
The approva l of the bidding information documents prepa red for the public tenders.
The app rov al of the resolution of public tenders for the execution of the projects .
The general monitoring of the programm e and the adoptio n of w hatever relevant
decisió n to be taken .
A ny othe r function assigned to the Bi-national Co mm ittee in t hese rules.
ARTICLE 111
THE TECHNICAL COMMITTEE
111.1. Acco rding to article 5.1. of the Program , the Bi-national Comm ittee w ill appoint a
Tec hnical Ass ista nce Unit or Technical Committee. tts main task will be giving
technical support to the Bi-national Committee in its decision ta king process.
Partic ularíy. the Technical Co mmittee will be in charge of:
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Ana lysing, from an economíc and social point of view, th e proiects to be financed
by t he program resources , in arder to give its opinion to the Bi-national Com mittee;
Raising to the Bi-naticnal Committee the proje cts previ ously considered to be
financed , tog ether with a summary of each proje ct where the main characteristics
of the proje ct are specified ;
Ass isting the Si-nat ional Committee in the follow up and the monitoring of the
Prog ram, partic ularty with respect to the accomplishm ent of the projects;
Prese nting to the Bi-national Committee: an annu al report on its yea rly act ivities
and t he financial situation of the Fund , a final report on the socia l and eco nom ic
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imp act of the debt swap program once it is fini shed and whatever reports are
needed to inform the Bi-nat ional Committee about the situation of the projects.
11 1.2. The Techni cal Comm ittee will be formed by five me mbers. Among them , the re will
be, on the Ghanaian side the Director of Aid and Debt Manag em ent Division of the
Mini stry of Finan ce and Economic Planning , the Director of Legal Affair s of the Minist ry
of Finance and Economi c Plann ing , the head of the Spain Desk of the Ministry of
Finance and Economi c Planning . On the Spanish side, the Economic and Co mmercial
Co unsellor of the Spanish Embassy in Ghana and the representative of the Spanish
Agency for Cooperat ion. In case a Spani sh NGO is establis hed in Gha na, the Bi­
National Co mmittee may decide on its eligibility to join the Technical Co mmittee .
Acco rding to the agenda , the appropriate representatives of secto rial ministries will
be invited .
111. 3. The Tec hnical Committee will meet whenever it is necessary ror the correct follow
up of the Program o Furthermore, the Techni cal Committee will meet before each Bi­
national Com m ittee meeting . The Technical Committee wilJ be in charge of distri buting
all the relevant documents for the Bi-national Committee meeti ngs. with at least 15
days in advan ce, so as all the members of the Bi-nati onal Committee members can
have time enough to study them.
The meetin gs of th e Technical Committee will be chaired altematively by Spa in and
Ghana. The Techni cal Committee Chair will be appointed by the Bi-naticnal
Co mmittee . The secretariat of the Technical Committee will be held by Ghana. The
meeting s will be summarized in Minutes.
ARTlCLE IV
THE FUNCTIONING OF THE GHANA-SPAIN FUND
IV.l . According to the Program articles 1.3. and 2.1. , a Ghana-Spain Debt for
Develop me nt Swap Fund (the Fund) will be created to contribute l o Ghana debt relief
by transforming Ghana's debt obligations towards Spain in investmen t projects with
impact in its economic and human development.
IV.2. Ghana will deposit in the Fund , in local currency (the cedi-G HC-) , th e exc hange
value of US$20 ,471,591 .70, according to the schedule speciñed in the An nex 2 of the
Program oThis amo unt corresponds to maturities related to the following ODA loans :
01046007 .0; 01046008 .0; 01046009 .0; 01046 010. 0; 0104 6011 .0; contracted on June
nd
2 1999, Ap ril t h 2000, March tz" 2001 , July 2 nd 2002 and July 11lh 2003 .
The exc hange rate used will be the one registered by the Ghan aian Ce ntral Bank two
working days before the date of disbursement
IV .3. The resources that form the Ghana-Spain Fund will be deposited in a current
accou nt decided by the Bi-national Committee. This current account has to be
rem unerated at least to cover the operational expenditures.
IV .4. The debt service of those credits that have not been totally amo rtized and those
credits that have not been affe cted by the Program will cont inue to be honoured by
Ghana.
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IV.5. AII payments charged to the Fund must have been authorized by the Bi-national
Committee. The payment s to the awarded companies will be done after having cert ified
the right to this payment , according to the contract's terms.
The payments made from this account wiJl need the signature of two members of the
8i-national Com mittee (one Ghanaia n and the other Spanish) . On the Ghanaian side,
the member will be the Director of Legal Affairs Division of the Ghanaian Ministry of
Finance and Economic Planning. In his absence. the alternative signatory will be the
Director of the Aid and Debt Managem ent División of MOFEP. On the Spanish side,
the member will be the Econom ic and Commercial Counsellor of the Spanish Embassy
in e nana. who will give the pertinent authorization to make any disbursement from the
Fund (after confirmation with the Spanish Ministry of Economy and Finance). In her
absence, the alternative signatory will be t he Directorate General 01 International
Financing of the Ministry of Economy and Finance .
The disburs ements of the funds should be made within 15 working days after the
authorization 01both parties .
IV.G. The Ghanaian Ministry of Economy and Finance will punct ually inform the
member s of the 8i-national Committee and the Spanish Official Credit Institute (ICO)
about the disbursements already made to the Fund. Particutarly. each time a
disbursement to the Fund is made. a certificate will be issued (following the templat e
included in ANNEX 1) properly signed by the person responsible in the Ghanaian
Ministry of Economy and Finance. The 8i-national Committee members and the ICO
wilJ also be punctuall y informed about each payment charged to the Fund.
IV.? Once the proje cts financed by the Fund are properiy carried out, the Economic
and Commercial Counsellor of the Spanish Emba ssy in Ghana will inform of that fact
to the ICO and the Deputy Director General for the Intemational Financia! System of
Spain. Furthermore , this Counsellor wilJ certificate that the final audit 01 the program
complies with the established procedure.
ARTICLE V
PROJECTS FINAN CEO WITH THE OEBT SWAP PROGRAM
V.1. According to articles 1.1 and 3.1 of the Program, the resources ofthe Fund will be
used to finance investment projects with impact in the economic and human
development of Ghana . The ownership of the proje cts will fall on a public Ghanaian
entity.
V.2 . The projects to be financed with the Fund resources will have to be socially.
economically and techni cally feasible .
ARTICLE VI
EXECUTOR ENTITIES
VI.1 The projects will have to be executed by Ghanaian and/or Spanish firms or non
govemment organizations for development (thereafter the executor entities) .
V1. 2. The executor entities must comply with the following entena:
.- they must be technicatly qualified and financially solvent
.- they must be up to date with fiscal payments
.- they must be committed with the fight against corruptlon , in particular:
.- the executor entity can not be included in the debarred lists published by
Ihe International Financialln stitutions;
.- the executor enlity has not been penalized for corruption by the Court in
the last ñve years:
.- the executor entity has Ihe commitment to give all the informalion Ihat a
Irial could ask for, under requiremenl , in an eventual judgement againsl
corruption .
ARTICLE VII
PROCESS OF
EVALUATION
PROJECT
SELECTION,
EXECUTION,
MONITORING
AND
1. First stage: presentation and selecl ion of the projects
The projects l o be financed by Ihe program must be sent to the Technical Committee
for its analysis. Both Ghana and Spain ca n submit projects to Ihe Technical Committee.
The Technical Committee will analyse Ihe projects accord ing lo Ihe principies set in Ihe
Program or in theses rules and according lo tbe prionties and guidelines set by Ihe Bi­
national Committee.
The Technical Committee will raise lo Ihe Bi-national Committee the evaluation that it
has made of the project proposed. The Bi-national Committee will then analyse Ihe
proposals and, laking into account Ihis study. it will decide which proiects are going lo
be financed .
In order to support the Bi-national Cornrnittee with the analysis, the Technical
Cornrnittee will provide the Bi-national Cornrnittee with all Ihe docurnenl s required to
assess each proposal; including a summary of each project (this summary must
include the main characteristics of the project) .
After the Bi-national Cornmittee has approved a project. Ihe Technical Committee will
establish the schedule of disbursemenls (in local currency) for its financing . This
schedule will establish a sel of instalmenl payments that will refer lo phases of the
project which scope (that musl be demcnstrated through certification) will result in
payment. The Technical Cornrnittee could hire external support lo guarantee that Ihe
paymenl schedule will lake into accounl Ihe specific cnaracterísucs of the particular
project.
2. Second stage: public tender
Once a project is approved, the executive enl ity will be selected through a public
l endering process.
This selection will be ruled by the principies of publicity, Iransparency and concurrence
and will be conducted by the competenl Adminisl rative Unit in Ghana.
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The Bi-nanonal Committee must give its approval l o the bidding intormation
docurnents .
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IV
The competent Administ rative Unit shall be responsible for making an assessment of
the tenders that have been submitted and an award proposal to be raised to the Bi­
national Committee in order to give, in its case, its approval. In order to make a
correct approva l, the Bi-national Committee will reeeive in advance all the doeuments
presented by the bidders and related to the public tender. AII the information sent to the
Bl-natiooal Committee will be submitted at least fifteen (15) days in advance of its
decisión.
3. Third stage: exeeution and monitorin9 the projeets .
During this phase, the Teehnieal Committee will monitor the correet execution of the
projects and will keep the Bi-national Committee informed.
The payments to the awarded companies witl be done after having certified the right to
this payment, according to the contraet's tenn s.
For the supervisión of these projects. the Bi-national Committee will receive reports
half-yearly from the Technical Committee. In the case that there existe external
support. these reports could be based on the work carried out by that external support.
The projects to be financed with the Fund have to include a public signal showing that
they were carried out with funds stemming from the Spanish debt swap mechanism .
This signal will follow these criteria:
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For investment projects, the firm that carnes out them will install a notice-board in
place, in the appropriate size according to the importanee of the works and during
al1 the duration of the project. The notice-board message will go as follows:
"PROJECT FINANCED W ITH RESOURCES STEMMING FROM THE GHANA­
SPAIN DEBT SWAP PROGRA M". The notice-board will be removed two months
after the end of the project and it will be replaced with a commemorative plaque,
generally placed at the principal public aceess area.
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For training projects, the firm that earries out them will put the promotional sentence
above-mentioned in the documents and will place the Spanish flag in the training
rooms.
4. Fourth stage: evaluation of the pro jects
Once each project is carried out, the Technical Committee will present to the Bi­
national Committee reports over its management and its resulte.
Each report on the assessmen t of a particular project must inelude at least the
following terms:
.- A summary of the characteristics of the project
.- A summary of the payments charged to the Fund to finance the project
.- An impact analysis -from the eco norr uc and human POlOt of vrew- to evaluate the
project effects on the developme nt of the area affected by rt
The Bi-national Committee will be allowed to hire external assrstancc to help the
Tectmical Committee 10 preparmg these report s.
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5. Evaluation of the Debt Swap Mechanism.
Each year (at least from the moment the projects to be financed by the Fund begin) the
Debt Swap Mechanism will be financiall y audited .
The Debt Swap Mechanism witt keep a remaining amount Ihat will be devoled to hire
an extemal audit and a com plele evaluation of Ihe whole Debt Swap Mechanism just
after the end of the Program or al any other lime, in the case the Bi-national Committee
deems it necessary.
The report made by Ihis external agent will be presenl ed lo the Bi-nationat Committee
for its analysis, and it must inelude at least:
.- A global audit of Ihe use of the Fund;
.• An assessmen l of each project. from an econom ic and social point ot view;
.- AA impacl analysis of the effects of the whole Program on Ihe development of the
beneficiary counlry ;
ARTICLE VIII : L1QUIOATION OF THE FUNO'S ASSETS
Once the Bi-national Committee concludes the program, the Bi-national Committee will
provide Ihe liquidation of the Fund and could Iransfer the assets resutting from the
liquidation l o Ghanaian public sector entities.
ARTICLE IX
COMING INTO FORCE, APPROVAL ANO MODlFICATION
VIII.1 This set of rules will come into force the date of its signature .
V Il 1.2 In all cases not cove red by Ih ese Rules, it sha!l prim arily apply the provlsíons
of the Prog ram and the Ghanaian law as appl icable .
VIII.3 These Rules, either in w hole or in part , can be mod ified by the Bi-national
Cornmittee.
Signed in Acera , on 22 nd March 2010 , in two original documenls
The Representative of THE
REPUBLlC OF GHANA
The Representali ve of THE SPAN ISH
MINISTRY
OF
ECONOMY
ANO
FINANCE
Ana de fa Cueva Femandez
Senior Adviser for the
International
Financial System
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ANNEX 1
Certificate ofthe disbursements made to the Ghana-Spain Fund
Mister
(name)
( Charge )
,,---=-;--;0:;--------,-,-,- of the
(Official /nstitution)
of the
Republic of Ghana, acco rding to the Debt Swap Agreement signed in Madrid, on May
th
8 2009 and in Acera , on June zs" 2009 betw een Spa in and Ghana, ce rtifies that up to
(date)XXXX the following disbur sem ent s to the Ghana-Spain Fund aceount have being
made:
ODA loan
affected
I Disbu rsernent date
Amounl in GHC e
-
I
Tota l in USS I
' The exc hange rate to be applied will be the one reg iste red by the Ghanaian Ce ntral
Ba nk in co nfo rm ity with the estabJished in the article 2.1 of the Program me.
In Ghana. on XXX><200X
Signature
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