Development bank boosts investment for major African infrastructure projects

The AfDB said an airport, new road transportation projects and electricity generating plants will be among the beneficiaries of its investment package.

A $120 million corporate loan for Ghana Airports Company Limited’s (GACL) capital investment programme marks the first private sector investment in Ghana’s transport sector financed by the bank, the AfDB said.

The airport programme “entails the construction of a new terminal at Kotoka International Airport (KIA) in Accra, and rehabilitation of other airports managed by GACL including Kumasi, Tamale, Ho and Wa”, the AfDB said. “The total loan facility for the programme is $400m to be financed with corporate loans from AfDB and other development financial institutions as well as commercial banks.”

According to the AfDB, the financing will support Ghana’s ambitions of “modernising vital infrastructure… through upgrading the airport to a gateway for West Africa and a regional aviation hub”. The programme will also increase air passenger handling capacity and “improve airport safety standards and efficiency” at KIA and the regional airports, the AfDB said.

Two loans amounting to a total of more than $141m have also been approved to finance the second phase of the Dar es Salaam Bus Rapid Transit (BRT) System Project in the commercial hub of Tanzania. A $97.42m loan from the AfDB and a $44.29m loan from the Africa Growing Together Fund, a Chinese trust fund managed by the AfDB, “will support Tanzania’s efforts to decongest the city”, the bank said. “The bank’s contribution to the project represents 88.9% of the total estimated cost of $159.32m while the government of Tanzania will provide the remaining 11.1%.”

The BRT is eventually expected to carry up to 495,000 passengers daily and reduce travel time, the AfDB said. “In addition, the use of modern BRT buses, which use cleaner fuels, will significantly reduce roadside concentration of greenhouse gas emissions thereby improving air quality and subsequently safeguarding people’s health.”

Meanwhile, a package of financial support worth the equivalent of more than €121m for the Gambia River Basin Development Organization (OMVG) will “improve electricity access and provide renewable, clean and affordable energy in The Gambia, Guinea, Guinea-Bissau and Senegal”, the AfDB said.

The Sambangalou hydro-electric dam, with an installed generating capacity of 128 megawatts, is being built under the ‘OMVG Energy Project’ to boost power supplies in the region, the AfDB said. The project will also see construction of an interconnection network comprising 1,677 kilometres of 225 kilovolt lines, 15 high/medium voltage transformer stations, and two load dispatch centres.

“Electricity supply in the OMVG region is limited, unreliable and costly,” the AfDB said. “Access rates vary from 12% in Guinea, 19% in Guinea-Bissau, 35% in The Gambia to 60% in Senegal. This places a huge burden on consumers in places with high unemployment and limited prospects for growing new electricity-dependent businesses. The objective of the project is to raise electricity access rates by 2020 to 20% in Guinea, 42% in The Gambia, 65% in Guinea Bissau, and to 75% in Senegal.”

AfDB energy, environment and climate change director Alex Rugamba said: “This project will help establish not only the backbone infrastructure necessary for the regional Gambia River Basin power industry, but the major regional electricity market covering the larger West African region as well. The progressive integration of isolated national grids into a unified interconnection system will help make electricity more accessible, reliable and affordable for those living in the region.”

The multi-donor OMVG project, costing a total €937.5m, is also supported by the European Investment Bank, French Development Agency, German Development Bank, Islamic Development Bank, Japanese International Cooperation Agency, Kuwait Fund for Arab Economic Development, West African Development Bank, World Bank, the governments of The Gambia, Guinea, Guinea-Bissau and Senegal, and the Export-Import Bank of China.

Figures released by the Infrastructure Consortium for Africa (ICA) last December showed that total infrastructure funding commitments on the continent increased for the second year running in 2013, with the energy, transport, water and information and communications technology sectors the key beneficiaries.

The ICA said commitments reported by its members, including the G8 nations, South Africa, the AfDB, Development Bank of Southern Africa, European Commission, European Investment Bank and the World Bank Group, were up 35% compared with 2012, reaching a record level of $25.3 billion.