AfDB extends $75 million loan to Ghana Infrastructure Investment Fund
The African Development Bank’s Board of Directors has officially approved a $75 million commercial loan to the Ghana Infrastructure Investment Fund (GIIF).
The loan, is to enable GIIF, efficiently leverage its paid-in equity capital of $325 million to secure additional debt resources to finance several critical Ghanaian infrastructure projects and reduce the country’s estimated multi-billion-dollar infrastructure finance deficit.
“This loan is an important step to anchor the sustainability of a national infrastructure financing vehicle in Ghana, a model we’d like to promote to bridge the infrastructure financing gap over the continent,” said Amadou Oumarou, African Development Bank Director for Infrastructure and Urban Development.
Since 2016, the Fund has committed over 88 per cent of its equity investment capital towards several infrastructure projects within the transport, climate resilient energy, ICT and affordable housing sectors, while successfully mobilising over one billion dollars of private capital from both domestic and international sources.
In terms of development impact, the Bank’s participation is expected to catalyse private sector-led infrastructure development, expand access to infrastructure services in Ghana, and generate significant employment opportunities.
The African Development Bank’s support aligns with Ghana’s Coordinated Programme of Economic and Social Development Policies 2017-2024 and Medium-Term National Development Policy Framework (MTDF 2018-2021), as well as the African Development Bank’s Ten-Year Strategy, and High-5 strategic priorities.
As of July 2021, the Bank has provided over $3 billion of financing for various projects in Ghana, of which over $600 million has been directed towards various road, aviation, and rail transportation projects.
About two months ago, the Ministry of Finance has launched a $7.4 million Institutional Support Project to strengthen domestic revenue mobilisation, also through a grant and loan agreements from AfDB.
The project fund is to facilitate ensure prudent debt management, deepen financial sector reforms and support capital market development.
Specifically, the funds would provide technical assistance and capacity building to improve efficiency in non-tax revenue collection and bolster debt and cash management reforms.
The project complements current efforts to strengthen domestic resource mobilisation in Ghana, following the challenges in revenue mobilisation due to supply disruptions caused by the Covid-19 pandemic.
READ ALSO: AfDB Launches Project To Boost Domestic Resource Mobilisation