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Swedish companies building railways in Ghana

Financing from SEK has made possible the largest railway investment in Ghana since the country’s independence in 1957. The new railways will increase Ghana’s export while creating new jobs and sustainable transportation.

Sustainable transportation

Facts

Transaction: Export credit
Amount: EUR 523 million (a separate additional commercial loan was arranged)
Maturity: Construction period, plus 14 years
Borrower: Ministry of Finance, Government of Ghana
Buyer: Ghana Railway Development Authority (GRDA)
Guaranteed by: Swedish Export Credit Agency (EKN) and Swiss Export Risk Insurance (SERV)
Arranger: Deutsche Bank AG

Facts

Transaction: Export credit
Amount: EUR 523 million (a separate additional commercial loan was arranged)
Maturity: Construction period, plus 14 years
Borrower: Ministry of Finance, Government of Ghana
Buyer: Ghana Railway Development Authority (GRDA)
Guaranteed by: Swedish Export Credit Agency (EKN) and Swiss Export Risk Insurance (SERV)
Arranger: Deutsche Bank AG

Ghana has one of the fastest growing economies in Africa, but has outdated infrastructure. The railways are narrow gauge and most of the country’s freight travels by heavy truck on the worn road network. Ghana’s government has therefore prioritized construction of the Western Railway Line which connects the port of Takoradi in the south with the city of Kumasi, including a branch line to the village of Awaso and the town of Nyinahin.

The railway construction is of considerable importance for freight (primarily cacao, manganese, bauxite, timber, cement, flour and oil) as well as passenger traffic along the route. The new railway tracks will enable trains to transport heavy goods more safely, faster and with less environmental impact.

 

“The railway project is a good example of how we in partnership with Swedish companies can increase Swedish exports of sustainable solutions. In addition to exports in excess of one billion Swedish kronor, we are ensuring that the project will be implemented pursuant to international standards.”

Per Edlundh, Director Export and Project Finance, at SEK

SEK is financing the transaction with an export credit of EUR 523 million. The transaction is guaranteed by EKN and arranged by Deutsche Bank. Investec Bank Limited acted as arranging and structuring bank for the commercial loan. Bluebird Finance & Projects has acted as lead financial advisor to the EPC.

“The loan is structured with a strong focus on international environmental and social standards. It will help strengthen Ghana’s economic growth by increasing both freight and passenger connectivity between the different regions in the country and enable transportation of different mineral deposits.”

Werner Schmidt, Global Head of Structured Trade & Export Finance, Deutsche Bank

The participation of Swedish companies in the delivery is a prerequisite for SEK and EKN to be able to finance and guarantee infrastructure projects abroad. EPC contractor Amandi Investment Limited is coordinating the entire project and trading house Elof Hansson, together with integration specialist XLIT, helped Amandi to coordinate the Swedish project deliveries.

“Elof Hansson International has helped Amandi with establishing a sufficiently large Swedish content to allow EKN and SEK to support the project. We will have direct or indirect involvement in about 70–75% of the Swedish content, corresponding to goods and services for about SEK 700 million. Our Swedish package comprises equipment from Sweden’s largest companies but also a lot of equipment from smaller and medium-sized companies, which feels highly positive.”

Björn Olausson, CEO of Elof Hansson International

The result includes Swedish deliveries including assembly equipment from Volvo Construction Equipment (VCE), signal systems from Alstom and railway wagons from Kiruna Wagon-Lit. XLIT will be managing the railway construction in partnership with Scandinavian Track Group (STG).

Would you like to know more?

Contact Per for more information.

per.edlundh@sek.se

08-613 83 98

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