Ghana says China to back $600 mln dam project

BEIJING, Nov 2 (Reuters) Ghana is close to finalising a 0 million deal with a Chinese corporation to build a 400 megawatt (MW) hydroelectric dam in the north of the West African country, the Ghanaian energy minister said on Thursday.

''It's virtually done; what's left is that we would like the Chinese to increase the grant element from 50 to 70 percent,'' Energy Minister Joseph Adda told Reuters in Beijing.

''That means we would pay for 30 per cent of the cost instead of half,'' he said, speaking on the eve of a summit hosted by China for African leaders to discuss development cooperation.

Ghanaian President John Kufuor met on Thursday with Fan Jixiang, group president of Sino Hydro Corporation, which is bidding to build the dam at Bui on the Black Volta river.

''The financing is going to come from the China Eximbank,'' Adda said.

Ghana, with an installed generating capacity of 1,700 MW, is rationing electricity due to low water levels at two dams on the Volta River.

The power rationing has affected industry, including the operations of foreign gold mining companies, and caused a public outcry.

Nearly two-thirds of the country's electric power comes from the Akosombo and Kpong dams in the east of the country. The rest is generated from thermal power.

''The Bui dam is uppermost in my heart,'' President Kufuor told Fan. ''And I'll be discussing it with president Hu Jintao.'' The two leaders are scheduled to meet on Friday on the sidelines of the China-Africa summit.

Over the last year, China has been rapidly expanding its links with the African continent, seeking fresh supplies of oil and raw materials to feed its fast-growing economy and backing major infrastructure projects.

Reuters SBA VP0012