View of the Port of Tema, in Ghana. © APM Terminals
If you’re eating a chocolate bar in Malaysia, Belgium, or the United States, odds are the cocoa bean flavoring was harvested in Ghana. Cocoa is one of Ghana’s top exports. Its globe-spanning journey typically starts at the country’s main seaport: the Port of Tema, 30 kilometers east of Accra.
That port is about to get a lot bigger and more efficient thanks to an over $1 billion project to build and operate a new container terminal. IFC is supporting the expansion by leading a $667 million financing package. This will nearly double the container capacity of Tema—which already handles more than 90 percent of Ghana’s container traffic—and create thousands of jobs through increased imports and exports.
The new deep-water container terminal is needed because the existing container terminal is reaching capacity and lacks the necessary infrastructure to accommodate deep-water cargo ships. Planned investments include a kilometer-long quay for three container berths, a yard for containers, a breakwater, and a new access channel with a deep draft to accommodate some of the world’s biggest container ships.
The project is a joint venture between the Ghana Ports and Harbors Authority, APM Terminals, and Bolloré Transport & Logistics. IFC’s financing package includes $195 million from our own account and $472 million from three commercial banks—Bank of China, Industrial and Commercial Bank of China, and Standard Bank—and the Dutch development bank FMO. It is IFC’s largest port sector investment to date and the biggest infrastructure mobilization in Sub-Saharan Africa.
The rise in imports and exports made possible by the new port construction and upgrades will have a significant ripple effect, leading to a positive impact on trade, economic growth, and job creation.
By increasing the revenues of Ghana’s import and export companies, the boost in trade is expected to lead to as much as a $1.1 billion rise in value added to the Ghanaian economy and as many as 450,000 new jobs, according to a study by QBIS Consulting conducted on behalf of APM Terminals.
Ghana’s largest port, Tema handles about 12 million tonnes of cargo a year, including petroleum, cement, aluminum products, and textiles. Our financing package for the Tema project—alongside the financing of other port projects around the world—represents our commitment to assisting country-led efforts to catalyze trade and promote economic growth.
In Ghana specifically, a large infrastructure deficit has limited the country’s competiveness and private sector development. Closing the infrastructure gap is an important pillar of the national development agenda.
The investment is well-timed. Ghana’s container market grew by 8 percent annually from 2005 to 2015. Regionally, the West African container market is expected to expand significantly over the next decade, driven by the increasing deployment of large vessels by shipping lines transporting commodities and other goods.
IFC has financed more than 60 port projects around the world—and anticipates further investments in Africa’s port sector in the coming years.
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Published in September 2016