Liberian Senate Ratifies EBOMAF, Hummingbird Agreements
Monrovia – The Liberian Senate Monday, June 11, ratified two financing agreements in concurrence with the House of Representatives.
Report by Henry Karmo, [email protected]
The agreements include Hummingbird Mineral Development Agreement and the US$420 million EBOMAF S.A Road Financing Agreement.
The EBOMAF financing agreements ratified during Monday special session brings to US$1 billion received as loan for road construction under the George Weah government. With just six months in office, this Liberian government has now done three agreements, which the Senate has now ratified in a week.
Last week the two Houses concurred on the ratification of the Eton US$536 million loan agreement for the construction of roads in southeastern Liberia.
The EBOMAF S.A loan with the government of Liberia will be used for the construction, rehabilitation and pavement of additional trunk of roads in the northern and other parts of Liberia.
The Senate’s concurrence follows Wednesday’s passage at the lower House where the agreement received a unanimous vote and one abstention.
The Central Bank of Liberia put the government’s consolidated account on the line in order to secure the US$536 million loan from ETON Private Finance, a private company, for the construction of roads linking the country’s southeastern counties.
President Weah in a communication to the legislature indicated that the US$536 million loan will also include the construction of a vocational training center in Greenville, Sinoe County; construction of a mini soccer stadium in Harper, Maryland County; Barclayville, Grand Kru County; Greenville, Sinoe County, Cestos City, Rivercesss County; Zwedru, Grand Gedeh County, Robertsport, Grand Cape Mount Count and Bopolu County.
The principal amount of the loan is said to be payable in 15 years by level payment at an interest rate of 1.46 percent per annum, with a seven-year interest and principal free grace period.
The loan agreement came under several criticisms, in particular, because of the unorthodox nature under which it is being acquired. The loaner, Eton Finance Private Ltd., has no proven record of undertaking such deals before and until recently declared itself as dormant.
Also during Monday’s special session, the Senate voted “yea” and “nay” to ratify the Hummingbird Mineral Development Agreement (MDA). The MDA received “nay” and “nay”. The vote was taken after the secretary of the senate read a report from the Senate’s Committee on Concession and Investment and Lands, Mines and Energy recommending ratification of the mineral agreement.
In an interview with reporters, Senate Pro-Tempore Albert Chie, assured the public that over the next 10 years, the government will accelerate the assessment, appraisal and sustainable development and management of its mineral resource band and other natural resources to improve the lives of the people especially rural dwellers and service these loans which have been obtained.
In November 2016, the Senate Joint Committee on Lands, Mines, Energy, Natural Resources & Environment; Judiciary, Claims, Human Rights & Petitions and Investment & Concessions, recommended to the plenary of the Liberian Senate to postpone ratification process of the proposed Mineral Development Agreement between the Hummingbird Resources (Liberia) Incorporated, pending some explanations from the Executive.
According to the joint committee’s report, principally the lumping of four exploration licenses into a single MDA instead of four separate MDAs, and the lack of a plan in the MDA towards the development and mining of the over four million ounces of inferred gold resources discovered in Sinoe County are concerns that need explanations from the Executive.
The Committee, in its concluding report to plenary, noted that the lumping together of the four exploration license areas into a single MDA instead of four in line with the New Minerals and Mining Law approved on April 3, 2000; will lead to revenue loss to the government in the tune of millions of United States dollars; “and significant reduction in social development funds and other benefits to the affected communities and the counties of Sinoe, Grand Kru, River Gee and Maryland.”
Besides the loss of revenue and benefits, the committee maintained that the areas could be susceptible to limited and impetuous exploration work, which could result into some of the areas prematurely and unjustifiably been declared uneconomical and making them relatively unattractive for future investment.
In the findings of the committee, during the formulation of the MDA, there should have been a provision setting aside a production lot (s) over the areas in Sinoe where the gold has been discovered or the company given a maximum of one year to declare production areas.
“Allotting the company five (5) additional years for exploration over these areas containing a minable gold resource after exploring for ten years, is excessive and the legal, technical and economic bases are debatable,” the joint committee concluded.
The ratification of the Mineral Development Agreement between the Government of Liberia and the Hummingbird Resources (Liberia) Inc., is one of several documents sent to the Legislature after they were recurred by former President Ellen Johnson Sirleaf through a proclamation.