Ghana: AfDB Approves US$ 16 Million Private Sector Loan to Finance Kempinski Accra Hotel
Tunis, 23 January 2008 – The Board of Directors of the African Development Bank (AfDB) approved on Wednesday in Tunis, a loan of US$ 16 million to finance the construction of Kempinski Accra Hotel in Ghana. The project is in line with the newly approved private sector operations strategy which aims to promote catalytic transactions with a strong demonstration effect and positive impacts on Small and Medium Enterprises (SMEs).
The project involves the development of a 250-room 5-star international hotel in the heart of the city, located on prime commercial real estate on the old Accra racecourse adjacent to the Accra International Conference Center (AICC), ministry buildings, the State House, the National Theatre and the Accra Sports Stadium.
Packaged as the centerpiece of a Public-private partnership project in the hospitality sector with integrated mixed-use facility ("Gold Coast City") in its first phase, with Zakhem International SA, a construction, engineering and investment group as the primary sponsor while GCC Resorts Ltd serves as the project company. The AfDB and the Amalgamated Bank of South Africa (ABSA) are senior lenders to the project.
The project is in line with the sector priorities of the Medium Term Ghana Poverty Reduction Strategy and the Bank’s Country Strategy Paper, which supports poverty reduction by improving the investment climate and facilitating public private partnerships. The project fits perfectly with the Bank’s partnership strategy to leverage its financing capacity and technical expertise by working with top-tier African commercial banks. The project has a component relating to local SMEs linkages during the construction and the operation. This is AfDB’s new approach to support more local SMEs to profit from large investments, in addition to the support of SMEs through financing financial intermediaries for on-lending.
The economic benefits will accrue to five main stakeholders: the government of Ghana, local labor, local SMEs; local development fund; and the Investors. The combined direct cash contribution to the Ghanaian economy from the project will represent about 58% of the total benefits while the investors retain about 38% of the estimated benefits.
The project will create substantial direct and indirect job opportunities. During the construction phase, about 500 construction workers will be employed in addition to other jobs for subcontractors and suppliers. From a human capacity development perspective, Zakhem will provide training programs developed by the engineers appointed by the Group as the main contractor. During the project’s operational phase, about 352 permanent direct jobs will be created and it is estimated that 30-40% of these employees will be women.
The total project cost is estimated at USD 49.4 million. The project will be financed with US$ 17.4 million of equity and US$ 32 million of senior debt from the AfDB and ABSA.
* 1 UA = 1.58025 USD = 1.42403 GHS as at 23/01/2007