The African Development Bank (AfDB) has extended a $75-million commercial loan to the Ghana Infrastructure Investment Fund (GIIF) to enable it to finance more projects.
The facility will enable the state-owned GIIF to efficiently leverage its equity capital of $325 million to secure additional debt resources to finance several critical infrastructural projects and reduce the country’s estimated multi-billion dollar infrastructure finance deficit.
The GIIF invests in the energy, transportation, telecomunications, agribusiness, heavy industry, oil and gas, mining, tourism, health, education, among other sectors.
As of August last year, the fund had committed $275 million into 12 transactions, with total value of $2.78 billion.
In a statement, the AfDB said the financial support aligned with Ghana’s Coordinated Programme of Economic and Social Development Policies 2017-2024 and the Medium-Term National Development Policy Framework (MTDF 2018-2021), as well as the bank’s 10-year strategy and High-5 strategic priorities. The statement was issued in Abidjan, Cote I’voire yesterday.
Quoting the AfDB’s Director for Infrastructure and Urban Development, Mr Amadou Oumarou, it stated: “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.”
According to the statement, since 2016, GIIF had committed over 88 per cent of its equity investment capital to several infrastructural projects in the transportation, climate resilient energy, information and communications technology (ICT) and affordable housing sectors.
It had also successfully mobilised over $1 billion in private capital from both domestic and international sources.
“In terms of development impact, the AfDB’s participation is expected to catalyse private sector-led infrastructural development, expand access to infrastructural services in Ghana and generate significant employment opportunities,” the statement added.
As of July 2021, the AfDB had provided over $3 billion in financing for various projects in Ghana, with over $600 million being directed into road, aviation and rail transportation projects.
The GIIF was set up by the Ghana Infrastructure Investment Fund Act, 2014 (Act 877) to mobilise, manage, coordinate and provide financial resources for investment in a diversified portfolio of infrastructural projects for national development.
Its investments are, therefore, to catalyse the development of critical infrastructure in the country and generate financial returns for its shareholder, the government.
It prosecutes its investments at the back of its own balance sheet, which will not bloat the public debt.