AfDB approves US $120-million corporate loan to Ghana Airports Company - First private sector investment in Ghana’s transport sector
On September 30, 2015, the Board of Directors of the African Development Bank (AfDB) approved a US $120-million corporate loan to support Ghana Airports Company Limited’s (GACL) capital investment programme. The programme entails the construction of a new terminal at Kotoka International Airport (KIA) in Accra, and rehabilitation of other airports managed by GACL including Kumasi, Tamale, Ho and Wa Airports. The loan is the first private-sector investment that the AfDB has financed in Ghana’s transport sector.
The total loan facility for the programme is US $400-million to be financed with corporate loans from AfDB and other development financial institutions as well as commercial banks.
The programme will support the country’s ambitions of modernizing vital infrastructure in Ghana through upgrading the airport to a gateway for West Africa and a regional aviation hub. The programme will also increase air passenger handling capacity and improving airport safety standards and efficiency at KIA and the regional airports.
Through strengthening the country’s airport infrastructure, the programme is expected to boost the country’s economy, in particular the growing tourism and oil and gas sectors, through facilitating connectivity to markets and reducing the cost of doing business. Developing national airport infrastructure will be critical building blocks for regional integration as Ghana has been serving as a platform in connecting regional landlocked countries to international markets and support inter-African trade. The expansion of KIA is expected to generate an estimated 900 temporary jobs during the two-year construction period and about 760 permanent jobs during operations and maintenance phase.
This project aligns well with both internal and external policies and strategies. It supports the Ghana Shared Growth and Development Agenda which emphasizes the need for rehabilitating and expanding infrastructural facilities especially in the transport sector. At sector level, the programme is in line with the priorities identified in the National Airport System Plan 2014.
The AfDB’s financing will play an important role by providing much needed long-term finance, enforcing environmental and social standards and working to enhance the development impact of the Project. The infrastructure nature of the programme aligns it well with AfDB’s Ten-Year Strategy as well as the Bank’s Country Strategy for Ghana, which focus on improving infrastructure and integration to regional markets.