As a developing nation, the aim of Ghana’s focus on infrastructure growth is driving socio-economic development and enabling greater productivity within the various sectors of the economy. The annual infrastructure funding gap is estimated at US$1.5 billion for the next decade; thus, the government and private sector participants have been challenged to develop innovative ways of bridging this gap. This has led to a growing reliance on the use of project finance for the development of infrastructure in Ghana. Traditionally, project financing mechanisms were more commonly used in raising financing for privately funded projects. However, the rise in the use of public-private partnerships (PPPs) for undertaking public infrastructure projects has resulted in an increased participation by public authorities in project financing transactions. The World Bank’s Private Participation in Infrastructure database indicates that of the 27 PPP projects that reached financial close between 1990 and 2018, only four have either been cancelled or are under duress, which is an indication of the commitment of parties to develop infrastructure through partnership arrangements. Multilateral agencies and development financial institutions, such as the World Bank Group and the African Development Bank, have had a key role in this process through the provision of funding and other credit enhancement facilities, such as partial risk guarantees to private investors and lenders. Their contributions have had a significant impact on the success of many project finance transactions in Ghana.
II THE YEAR IN REVIEW
Ghana has seen a considerable number of project finance transactions in recent years, predominantly in the energy, road, aviation and maritime sectors. The need to diversify the power generation portfolio in the country in the midst of recurrent power outages led to the development of a significant number of power projects, including the Amandi Power Plant, the Ayitepa Wind Farm, the Cenpower Kpone Independent Power Plant and the Sunon Asogli Power Project. However, during the past year, a renewed focus by the government on transport infrastructure has resulted in increased activity within the rail and maritime sectors. Notable transactions include the Eastern Railway Line, the Accra–Ouagadougou Railway Line, the AI Skytrain Project and the Takoradi Multi-Purpose Container Terminal. The legal and regulatory framework has not seen any changes in the past year. The PPP Bill, drafted in 2016, is being considered by Cabinet before being relaid in Parliament. In the meantime, the 2012 PPP Policy continues to apply.