African Export-Import Bank (Afreximbank) and Ghana Railway Company have signed a project preparation facility, heads of terms agreement and pre-mandate letter, to finance the development and implementation of a western railway corridor project.
The 299-kilometer standard gauge railway network connects Ghana’s western railway corridor to the Port of Takoradi and provides an essential link to external markets.
The Heads of Terms was signed by Kanayo Awani-Executive Vice President, Intra-African Trade Bank, Afreximbank, and Dr. Michael Anyetei- Managing Director, Ghana Railway Company Limited.
Under the terms of the agreements, signed during the Afreximbank Annual Meeting (AAM2023), Afreximbank committed to prescribe financial solution, including project preparatory support, project financing, syndication and financial advisory services, and risk bearing instruments, to enable the project attain a timeous financial close.
Also read: Takoradi – Kumasi Standard Gauge (Western) Railway Line Project Updates, Ghana
The western railways corridor project is expected to reduce transport costs by 30 per cent
Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank said, “The Western Railway Corridor project is a vital transport network for Ghana and Afreximbank support is in line with our commitment to help member countries address key trade-enabling infrastructure bottlenecks through private sector-led investments that will unlock significant pent-up demand for the Ghanaian mineral and agricultural commodities in regional and international markets.”
“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 noel 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 continents,” he said.
The project, when fully implemented, is expected to reduce transport costs by 30 per cent, increase the safety and reliability of transport services and stimulate Ghanaian trade and economic growth.
About 5,000 jobs are expected to be created directly during the implementation phase, with another 50,000 indirect opportunities created along the railway corridor to the training of 400 citizens of Ghana to participate in all levels of project implementation.
The railways line also facilitates the export of minerals and commodities resulting in at least $950 million of trade per annum.
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.
