THE African Export-Import Bank (Afreximbank) and Ghana Railway Company have joined forces to finance the development and implementation of an integrated 299-kilometre standard gauge railway network in Ghana. The project aims to connect Ghana’s western corridor to the Port of Takoradi and establish a crucial link to external markets.
The Head of Terms agreement and Pre-Mandate Letter were signed by Kanayo Awani, Executive Vice President at Afreximbank, and Michael Anyetei, Managing Director of Ghana Railways Company Limited. The agreement outlines the provision of early-stage project preparatory funding for bankable feasibility studies. Afreximbank has been appointed to undertake certain tasks to advance the project’s bankability, with a target debt facility amount estimated at $2.1bn.
The agreements were signed during the Afreximbank Annual Meetings (AAM2023) earlier this week, committing Afreximbank to offer financial solutions, project financing, syndication and financial advisory services, and risk-bearing instruments to ensure a timely financial close for the project.
The development of railway investments along trade corridors is seen by Afreximbank as a means to expand capacities and create new routes for the transportation of value-added goods from manufacturing and processing areas to regional and global markets. This aligns with the goal of promoting intra-African trade within the context of the African Continental Free Trade Area (AfCFTA). The project is expected to benefit from upcoming mining projects and the expansion of existing ones, as it will enhance the efficiency and competitiveness of import and export transportation, thereby boosting trade, regional integration, and overall economic development.
Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, expressed his excitement about the project, highlighting its significance for Ghana’s transport network. He emphasised Afreximbank’s commitment to addressing trade-enabling infrastructure bottlenecks through private sector-led investments, unlocking the demand for Ghanaian mineral and agricultural commodities in regional and international markets. He also mentioned the innovative non-recourse project finance solution based on freight volumes, which represents a step toward economic transformation in member countries.
‘The Western Railway Corridor project is a vital transport network for Ghana, and Afreximbank’s support is in line with our commitment to help member countries address key trade-e
nabling 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,’ he said.
Oramah added: ‘Am particularly thrilled that in this project, Afreximbank and its partners are pioneering our innovative non-recourse project finance solution 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 member countries economic transformation. We look forward to rolling out this solution to other member countries across the continent.’
Once fully implemented, the project is expected to re
duce transport costs by 30 percent, improve the safety and reliability of transport services, and stimulate Ghanaian trade and economic growth. The project’s implementation phase alone is projected to create about 5,000 direct jobs and an additional 50,000 indirect opportunities along the railway corridor. Moreover, 400 Ghanaians will receive training to participate in all levels of the project implementation. The railway line is anticipated to facilitate mineral and commodity exports, resulting in a trade value of at least $950 million per year.
