Ghana has secured a €280 million Social Loan financing from Standard Chartered Bank to develop a section of the Eastern Corridor road with the aim of transforming the country’s transport infrastructure. This is the first social loan in Sun-Saharan Africa (SSA).
The Director of Structured Export Finance at Standard Chartered Bank, Desislava Radeva, expressed his excitement for issuing the first loan of this kind in SSA.
“We are proud to build on our strong relationship with the Ministry of Finance, Ghana to deliver a bespoke ECA-backed solution to enable the development of this critical infrastructure project. We are equally excited to have signed the first Social Loan in Sub-Saharan Africa”.
In a press release, Standard Chartered indicated that as the first in the industry, it has structured the financing to fully comply with the recently published Social Loan Principles (SLPs). Meanwhile, this is the first time a Social Loan has been structured not only in Ghana but on the wider African continent.
According to Standard Chartered, Euler Hermes, a German Export Credit Agency backed the financing. Moreover, the Bank noted that INZAG Germany GmbH, a client of the Bank, is the chosen Engineering, Procurement and Construction contractor.
Standard Chartered as Bookrunner
The press release further indicated that Standard Chartered acted as Bookrunner, Mandated Lead Arranger, Structuring Bank, Social Loan Co-Ordinator, Original Lender and Agent.
The project qualified for a social loan financing since its objective is to improve the basic transport network, which is categorized as affordable basic infrastructure. Also, the project will contribute towards meeting the United Nations’ Sustainable Development Goal 9, which relates to industry, innovation and infrastructure.
Meanwhile, Xorse Godzi, Head of Corporate, Commercial and Institutional Banking, Standard Chartered Bank Ghana Plc, highlighted the significance of the loan to the Bank. He also highlighted the significant role the Bank has played in Ghana’s national developmental agenda.
“Our involvement in the project is a prime example of Standard Chartered living up to its brand promise… and supporting our communities. Having operated in Ghana for over 125 years, we are able to advise and play a leading role in tapping liquidity around the world for major sustainable infrastructure projects in the country to help Ghana achieve the United Nations’ Sustainable Development Goals.”
Furthermore, Naim Danji, Head of Export Finance, INZAG Germany GmbH, expressed delight to execute this project. He added that INZAG is “ looking forward to the successful development and construction of this flagship infrastructure for the country of Ghana”.
The transaction is the sixth ECA-supported deal in Ghana arranged by Standard Chartered Bank in the past 12 months. This brings the total amount of financing to over €560 million; delivering a wide range of transport and healthcare infrastructure in Ghana.
The Ghana Eastern Corridor road
The Ghana Eastern Corridor road starts at the Tema roundabout and ends in Kalungugu, the north-eastern border with Burkina Faso. Standard Chartered’s financing will fund a particular intersection of the road, otherwise known as Lot 1. This includes two flyovers and interchanges, 11 pedestrian bridges and three mixed bridges in a dual carriageway.
It stretches from the Ashaiman roundabout and ends at the Akosombo Junction, a distance of 64km. When completed, the Ministry of Roads and Highways expects the upgraded, tolled route to positively impact the lives of around 500,000 residents from underserved populations.
Moreover, the Highway is expected to drive employment opportunities and trade, providing shorter access to the port of Tema and will link regions within Ghana, and also to neighbouring countries. Additionally, the intersection will improve road safety and better access to healthcare and other essential services.
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