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Ghana secures US$450m ATI-backed insurance for trade and investment

Ghana has secured US$450 million African Trade Insurance Agency (ATI)-backed insurance cover for projects and trade-related transactions in various sectors as at the end of May 2022.

With an insured portfolio of trade and investments across Africa valued at US$6.6billion in 2021, ATI – a multilateral insurer – continues to serve in bridging in the gap by providing risk insurance on the African continent between sovereigns and investors as well as creditors and suppliers.

In a media briefing ahead of the ATI 22nd Annual General Meeting in Accra, the Chief Executive Officer (CEO) of African Trade Insurance Agency (ATI), Manuel Moses said: “This clout is essentially what will benefit Ghana on several fronts. First, thanks to its membership in ATI, government can like other West African member-countries of ATI use ATI’s insurance to attract commercial financing at the level of more developed economies”.

Mr. Moses added: “ATI has supported Ghana’s sovereign on a number of infrastructure projects over the past two years of membership. ATI provided guarantees against the risk of sovereign default, which allowed international banks to provide funding for the projects”.

The projects are the €80million financing for the Bolgatanga–Bawku–Pulmakon Road Project, as well as the  €148million financing package for reconstruction of the Tarkwa-Agona-Nkwanta Road and Bechem-Akumadan Road.

The other project is the €55million financing package for construction of Trauma Hospitals in Obuasi and Anyinam; a new Accident and Emergency centre at Enyiresi Hospital; and the rehabilitation of Obuasi Health Centre.

“These projects are in addition to a pipeline of transactions that ATI expects to complete in the coming months,” he highlighted.

In essence, Ghana will have better financing terms and longer duration – and can subsequently help pay off more expensive debts and create a more sustainable debt management process.

“We have an active exposure on commercial transactions of over US$121million across the following sectors: energy and gas; mining and quarrying; construction; and financial and insurance activities,” he added.

In the financial services sector, banks in particular stand to gain as ATI’s presence will help increase access to credit insurance. This insurance supplements the collateral that banks heavily rely on in lending to Small and Medium-sized Enterprises (SMEs).

The manufacturing and trade sectors also benefit from ATI’s credit insurance by expanding their sales beyond Ghana, enabling a targetted approach for exporters and suppliers to import needed goods that can help build their companies.

In the Energy Sector, through ATI’s Regional Liquidity Support Facility (RLSF) backed by KfW Development Bank and NORAD, Ghana is expected to receive some funds which will help mitigate the negative impacts of climate change. The Facility was created to help tackle climate change by supporting renewable energy projects in ATI’s member-countries.

RLSF supports small- and mid-scale renewable energy projects by protecting the developers against the risk of delayed payments by public off-takers. This ensures that more renewable energy projects reach financial close, enabling government create a greener energy mix to help mitigate climate change.

The Facility can be accessed once Ghana signs onto the RLSF Memorandum of Understanding, as this process is expected to be finalised over the next year.

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