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Non-SADC – Ghana Airports Company Capex Programme

The DBSA was invited by the Mandated Lead Arranger (MLA), EcoBank Capital (EcoBank) to participate in the fifteen year multi-tranche USD400 million senior debt financing of the Ghana Airports Company Limited (GACL). GACL is a stateowned company in charge of the operation and management of Ghanaian airports, and is in the process of raising funding for its capex programme in Ghana. The purpose of the capex programme is to refurbish and expand various airports across Ghana, but particularly the Kotoka International Airport (KIA) in Accra, which is the gateway to the country for a growing international visitor complement.
The total capex programme consists of the following projects:

  • Kotoka International Airport: construction of a new terminal building (terminal 3)
  • Kumasi Airport: construction of a new terminal building, air traffic control tower and fire station, and extension of runway
  • Tamale Airport: construction of modern terminal building (to position Tamale as an alternative international airport to KIA, particularly for the ECOWAS region) extension of runway, construction of apron for Code C aircraft, installation of aeronautical ground lighting
  • Ho Airport: construction of new terminal building, a new runway with three parking stands for Code C aircraft, and construction of air traffic control building
  • Wa Airport: conversion of part of existing building into terminal building

The transaction was split into two tranches: Tranche I is a commercial bank tranche of USD250 million with a seven year tenor (inclusive of a 2-year capital grace period) and a margin of 8.0% above 3-month LIBOR. The legal documents for tranche I were signed in June 2015, with the participation of the Africa Finance Corporation (AFC), Barclays Bank Ghana, EcoBank, Ghana International Bank, Nedbank London, Qatar National Bank, Standard Chartered Bank and UT Bank. The client negotiated that this tranche would not attract any penalties, should it not be fully drawn, thus allowing them flexibility to increase the quantum of the DFI tranche, which has a longer tenor Tranche II, in which the DBSA participated, is a DFI tranche of USD150 million with a client preferred tenor of fifteen years (inclusive of a 5-year capital grace period). The long grace period was meant to avoid pressure on GACL’s cash flows during the early years of the loan. Expressions of Interest (project participation) in Tranche II were received from the African Development Bank, Agence Française de Développement, and from the DBSA.

GACL’s capabilities were bolstered by the collaboration and partnership with the Airports Company of South Africa (ACSA). On 29 April 2014, GACL and ACSA entered into an agreement under a Memorandum of Understanding, by which ACSA was to provide GACL with airport management and technical support services for a period of five years. The rationale for GACL’s entering into the  partnership arrangement with ACSA was to leverage off ACSA’s technical and managerial skills to position itself as the leader in the business of airport operations in the ECOWAS sub-region on the continent. This augurs well for the forging of the DBSA’s strategic partnerships through South Africa Incorporated’s (SA Inc.’s) participation in the development of infrastructure in Africa.

The project is an expansion of existing facilities and existing functional infrastructure in the country. Road infrastructure with new transport routes was considered for the KIA airport to ease congestion. The airport was considered a strategic node by government from a security perspective. Given this, the power challenges facing the country did not extend to the airports. The DBSA’s exposure in Ghana shows the Bank’s commitment to the development of infrastructure in that country. The government of Ghana, through GACL is looking to develop airport infrastructure for numerous developmental reasons, including:

  • To attract foreign investment and foreign spending into the country, by facilitating the easy movement of travellers around the country;
  • To position Ghana as an air transport hub for the ECOWAS sub-region, by transforming itself into a world-class operator and manager of airports;
  • To develop Tamale as a domestic and regional trading hub, given its proximity to the landlocked countries of the Sahelian region; and
  • To develop Kumasi as a secondary business capital alongside Accra by increasing the capacity of the Kumasi Airport to accommodate an increased frequency of flights to KIA.

The DBSA was invited by the Mandated Lead Arranger (MLA), EcoBank Capital (EcoBank) to participate in the fifteen year multi-tranche USD400 million senior debt financing of the Ghana Airports Company Limited (GACL)