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A World Bank Study
for key variables such as exchange rates (since retail tariffs are denominated in Ghanaian Cedi, while purchase agreements are typically denominated in the investors’ currency). The MoFEP should also note any commitments under the PPP contract that would require action by other GoG entities—such as providing additional power connections to a new water treatment plant—and clarify how the cost of these actions will be met. As noted in the introduction to this chapter, the views of each entity regarding the FCs for a proposed PPP should be drawn together into an FCTC recommendation to the relevant PPP project approving body. The aim is to ensure a consistent view on the affordability of the PPP project. The Project and Financial Analysis Unit (PFA), as secretariat of the FCTC, will be responsible for coordinating this joint recommendation in a timely way to feed into the PPP approval at each stage of the process.
Notes 1. The categorization of projects is listed in figure 4.1—denoted as P1, P2, and P3—and is also covered in the PPP Policy in paragraph 52 and in the associated Approval Schedule on page 18. 2. The PPP Approval Committee includes but is not limited to: Minister responsible for Finance (in the Chair), Chairman of the National Development Planning Commission (NDPC), Minister of Justice and Attorney General, Minister of Trade and Industry, Chief Executive of Ghana Investment Promotion Centre, Director of Public Procurement Authority, and Minister of the Contracting Authority of the PPP under consideration (or where there is no sector minister, the head of the contracting authority or his designated representative). 3. For more information on the proposed PPP Law, see the GoG Draft PPP Law Interim Report (March-April 2012). A draft PPP law is expected to be completed and presented to parliament in 2013. 4. WBI PPP Reference Guide V.1 5. Using the government’s long-term borrowing cost will yield a PV that is comparable to the size of a loan that would create a similar repayment stream. Adjusting for risk would also be an option—particularly in the case of CLs—but is arguably less appropriate when discounting a stream of costs than a stream of revenues.