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Collapse of U.S. Government Project at U of Ghana

July 22, 2019
 
 

The collapse of a public-private expansion project at the University of Ghana backed by the U.S. government represented a setback for American efforts to counter China’s investment influence in Africa, The Wall Street Journal reported. The U.S. government’s Overseas Private Investment Corp. teamed with the New York-based real estate investor W. P. Carey on the project to build facilities to house 984 students and to teach science, technology, education and the humanities.

OPIC agreed to provide political risk insurance and a $41 million loan, which was not drawn. The announced cost for the project was $64 million, and the developer planned to lease it back to the university for more than $600 million over 25 years.

Construction began in 2015 but ended in 2016 after a new vice chancellor opposed the deal -- he was quoted in Ghanaian media saying it "enslaves" the university -- and the project came to an end in 2017. A lawyer subsequently determined a $165.8 million termination fee for the project, but W. P. Carey instead claimed a $45.6 million insurance policy from OPIC and the insurance company Chubb, representing a gain of at least $10 million. A spokesman for W. P. Carey said it is up to the insurers to determine whether to seek payment of the termination fee.

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