Dr. Michael Anyetei and Mrs. Kanayo Awani exchanging the agreement
The African Export-Import Bank (Afreximbank) and Ghana Railway Company, have signed a project preparation facility Head of Terms agreement and Pre-Mandate Letter to finance the development and implementation of an integrated 299-kilometer (“km”) standard gauge railway network.
When completed, the railway connecting Ghana’s western corridor to the Port of Takoradi and providing an essential link to external markets is expected to reduce transport costs by 30 percent, increase transport safety and reliability, and stimulate Ghanaian trade and economic growth.
It is also estimated that 5,000 jobs will be created directly during the implementation phase. In addition, another 50,000 indirect jobs will be created along the railway corridor.
According to the President and Chairman of the Board of Directors of Afreximbank, Prof. Benedict Oramah, the bank is committed to prescribing financial solutions, including preparatory project support, project financing, syndication and financial advisory services, and risk-bearing instruments, to enable the project to attain a timely financial close.
The Bank will provide early-stage project initial funding to finance bankable feasibility studies. The Pre-Mandate Letter will also perform specific tasks in advance of the project in attaining bankability aimed at raising the debt facility amount, currently estimated at US$ 2.1 billion.
He said, “The Western Railway Corridor project is a vital transport network for Ghana, and AFRXIMbank’s support is in line with our commitment to helping member countries address key trade-enabling infrastructure bottlenecks through private sector-led investments that will unlock significant pent-up demand for Ghanaian mineral and agricultural commodities in regional and international markets.”
Prof. Oramah added that he is particularly thrilled that Afreximbank and its partners are pioneering innovative non-recourse project finance solutions premised on freight volumes and not member countries’ debt-carrying capacity.
“Such novel approaches present concrete steps Afreximbank is taking towards paving the way for the economic transformation of its member countries. We look forward to rolling out this solution to other member countries across the continent. “He added.
Prof. Oramah also stated that the Bank believes that pursuing railway investments along the continent’s trade corridors would expand existing capacities and create new routes, links, and pathways for value-added goods to be transported from manufacturing and processing areas to regional and global markets, thereby promoting intra-African trade within the AfCFTA context.
The Heads of Terms were signed by Mrs. Kanayo Awani, Executive Vice President, Intra-African Trade Bank at Afreximbank, and Dr. Michael Anyetei, Managing Director, Ghana Railways Company Limited during the Afreximbank Annual Meetings (AAM2023) in Accra.
BY Prince Fiifi Yorke