Ghana has secured US$1 million from the African Export-Import Bank (Afreximbank) to conduct a feasibility study for its railway development project.
The study aims to unlock an estimated US$3.5 billion worth of assets for railway rehabilitation and development, which will boost economic activities and facilitate the transportation of people and goods.
The US$1 million grant will be given to the Ghana Railway Company Limited as a project preparation facility for the Western corridor railway line. This will help the Bank to assess the financial and technical assistance that it can offer to Ghana and attract more private investment of up to US$3.5 billion for its railway rehabilitation and development.
Ghana signed an agreement for the US$1 million feasibility study with Afreximbank on Wednesday, June 19, on the sidelines of the Bank’s 2023 annual meetings in Accra. The agreement was one of six signed on that day.
Kanyao Awani, Executive Vice President of Afreximbank, told the Ghana News Agency after the signing ceremony that the feasibility study was essential for the success of the project.
She said: “Many a time when you’re doing a project, you need to do some development work to bring the project to bankability before you send it to your bank and that’s what we’re doing with this facility.”
“The government of Ghana is looking for project finance for the Western corridor railway project, but we have to do the feasibility studies first, including technical studies to bring the project to bankability,” she added.
She explained that the feasibility studies would adopt an innovative demand- driven non-recourse model to ensure the commercial viability and financial self-sustainability of the project, which should not rely on government subsidies.
She said that once successfully implemented, the project would serve as a blueprint that Afreximbank would replicate in other member countries across other trade-enabling infrastructure.
Ken Ofori-Atta, Finance Minister of Ghana, emphasized the importance of conducting the feasibility studies in attracting not only funds from Afreximbank, but also other private sector investment for railway development to support economic activities.
He said: “Our railway capacity is about US$3.5 million, but a lot of are not working. When we do this feasibility studies, Afreximbank and other private investors can support us with the rehabilitation and other railway projects.”
The Western corridor railway project, which includes the associated infrastructure, training and operations and maintenance management is expected to transform Ghana’s existing rail network into a modern, robust and integrated railway system.
The project has huge potentials for haulage of both liquid and bulk cargo, and would run from Takoradi Port to Huni Valley to Obuasi, including a branch line from Dunkwa to Awaso, to Nyinahin and to Eduadin.
