Innovating Green Finance For A Thriving Alternative Aluminium Complex
Context
Bridging the infrastructure deficit and addressing the increasing unemployment situation among the teeming youth population in rural and urban communities in Ghana is a priority commitment of the Government of Ghana. This commitment has informed several innovative financing packages to drive investment for massive infrastructure development while at the same time catalyzing several public private partnerships that is spearheading the establishment of small-medium to large scale value addition industries, creating thousands of jobs for the youth.
The Sinohydro deal between the Government of Ghana and Sinohydro of the People’s Republic of China to maximize the revenues from Ghana’s bauxite reserves by turning it into a value-added commodity to serve as security for financing massive infrastructure and job creation imperatives is one such innovative deals. It is expected that the aluminium industry will have a capacity of 4-6 m tons (four to six million tons) of alumina and lead to the creation of over 35,000 new jobs (10,000 direct and 25,000 indirect). The Sinohydro Barter Deal with the Government of Ghana will make available $2bn infrastructure development support to Ghana, that will see several roads networks, hospitals and industries developed to drive socio-economic development in Ghana. The Tamale Interchange, the Pwalugu dam, the Coastal road in Accra, Accra Inner Roads have commenced while others like the PTC Roundabout Interchange, in Sekondi-Takoradi, will commence before end of the year. As such, the clock is ticking on when Ghana must deliver alumina to Sinohydro under the innovative barter deal. This deal is further cementing the already strong south-south relationship between the Government of Ghana and the People’s Republic of China.
The Sinohydro deal will see Ghana leverage bauxite reserves in two locations, Nyinahin in the Ashanti Region, and Kyebi in the Eastern Region of Ghana. The Kyebi bauxite reserves sits on a climate amelioration and carbon emissions reduction green landscape that is at the heart of the people of Akyem Abuakwa Traditional Area, with long-standing cultural and traditional significance for His Majesty the Okyenhene of Akyem Abuakwa Traditional Area , his -Chiefs and people, the people of Ghana and the rest of the world, given the interconnected nature of the global village we live in.
The prospects of the impact of the Sinohydro deal on the ecological and hydrological benefits of Atewa Forest, which is not only a hydrological gem, but also a carbon sink equivalent to 3MtCOe per annum cannot be underestimated. This means the forest can absorb and store the 3 million tons of carbon dioxide from the atmosphere, which is equivalent to the carbon dioxide produced by consuming 7 million barrels of oil. This is a huge contribution to Ghana’s climate change mitigation. The direct financial value of the carbon credits, excluding all other services, ranges from USD15m to USD39m (fifteen to thirty nine million US Dollars only) per annum and provides an opportunity to enhance the ‘green credentials’ of the security package into one that will spur a green economy while meeting the aspirations of bridging the infrastructure gap and providing thousands of jobs.
An innovative Carbon Credit Based Green Finance (CCBGF) that will develop an alternate bauxite deposit and alumina smelter while securing the Atewa forest and eco-system is envisaged. As earlier mentioned, Ghana has at least two bauxite deposits and the idea is that rail systems and a gas pipeline to Nyinahin shall be financed via the CCBGF. Such an approach that secures the forest ecosystem and water services will foster the sustainable ecological civilization development agenda of the Government of Ghana, the People’s Republic of China and at the same time advancing the aspirations of HM the Okyenhene to secure a green and living landscape, that will still provide 1000s of jobs to the youth in the Akyem-Abuakwa area in particular and other parts of Ghana in general.
