A new wave of projects in Ghana

PPP project opportunities
January 12, 2016

The Ghanaian government has recently published a new pipeline of PPP project opportunities, which may spark an interest in the international contracting, investor and lending community.

This new pipeline comes at a time when Ghana is seeking to demonstrate an improvement in its fiscal stability and attract longer-term foreign investment. Most recently Ghana took a positive step in this direction with the issue of its USD1 billion sovereign bond, partially guaranteed by a USD400 million guarantee from the World Bank Group’s International Development Association (IDA), as well as securing a further USD300 million of World Bank guarantees for other projects.

The development of a PPP programme has been on the cards for some time in Ghana, but implementation has been slow and the development of projects has been patchy. Only a limited number of major “PPP-style” projects have reached financial close in the last 10 years – by one reckoning fewer than 10 – with all but two in the energy sector and the remaining projects in the water sector. For obvious reasons, transport projects normally follow closely behind energy projects in the list of most developing countries’ project priorities, however Ghana has not undertaken a transport PPP project since 2003.

This may soon change if the latest round of PPP projects proceed as planned. By way of a snapshot, the Public Investment Division of the Ghanaian Ministry of Finance, has highlighted the following projects for priority status:

Public Investment Division - Priority projects


Industry Sector



Estimated close date

Accra-Tema motorway


US$200 to 300 million

Late stage, construction has just started1

The project is part of the Tema Port expansion project which is due to be fully completed by the end of 2019

Accra-Kumasi road


US$400 million

Late stage, construction ongoing2

Due to be completed by early 2016

Accra Takoradi road


US$600 million

Early stage3


Tema Port expansion project


US$1.5 billion

Late stage, construction due to begin4

The project is due to be fully completed by the end of 20195

Takoradi Port expansion project


US$197 million

Late stage, construction ongoing6

The project is due to be completed by end of 2016

Boankra Inland Port and Eastern railway line

Port, Rail

US$900 million to 1.5 billion

Early stage, construction ongoing7


In addition there are a number of priority projects slated for development in the accommodation sectors, including residential apartments in Accra, government accommodation for Securities and Exchange Commission, a convention centre/hotel, a sports complex with residential facilities, and reconstruction of accommodation for a community market.

For completeness, a number of other major projects are also underway or have been under recent consideration, outside the ambit of the Public Investment Division:

Other Key Projects


Industry Sector



Estimated close date

Asutsuare bulk water DBFO

Water & Sewerage

US$565 million

Late stage, construction ongoing

The first water is expect to come to stream in 2016 and the second in 20188

Sogakope-Lome trans boundary water supply

Water & Sewerage


Early stage, memorandum of understanding has been signed9

The project is due to be fully completed by the end of 201910

Sankofa integrated oil and gas project


US$ 7 billion11

Late stage, construction ongoing12

First oil and gas production will be phased though 2017 and early 2018

155 MW Ghana nzema solar PV


US$400 million

Late stage, construction ongoing13

Due to be fully operational in 201714

225MW Ayitepa wind farm


US$525 million

Late stage, construction is due to start in 201615

Aim is to start generating electricity by the end of 201616

28MW solar plant


US$60 million

Early stage, some letter of intent in relation to financing received17


360MW Aboadze Jacobson Jelco gas fired plant


US$528 million

Construction ongoing18

Q3 201619

Ghana 1000


>US$1 billion

Late stage, construction ongoing

First phase expected to be completed in late 201620

Ghana LNG import terminal


US$500 million

Late stage, construction on going

The project is due to be fully completed by 202021

Atuabo freeport project


US$700 million22

Late stage, construction begins next year23

The project is due to be fully completed by 2017

Volta lake transport corridor



Early stage, memorandum of understanding has been signed between company and contractor

Project will take four years to complete24

Kotoka international airport redevelopment



Late stage, construction ongoing

First phase due to be completed December 201525

Prampram new international airport



Early stage, designs have been presented26


Sector focus


Port expansion projects are well represented in the current project pipeline. This includes a proposed expansion at the existing Tema Port (already under concession), to create an additional throughput capacity of 3.5 million TEUs, as well as a significant upgrade of USD350m at Takoradi Port for construction of a new dry bulk terminal, and plans for further expansion for liquid bulk, container and general cargo facilities.

Both projects represent significant construction and financing opportunities for international contractors and lenders and also form part of a series of significant port developments taking place throughout African coastal countries, with significant regional developments also taking place in Nigeria, Côte D’Ivoire, Togo and Senegal. All of these have or can expect strong support from the African Development Bank as they form part of its key mission to improve intra-African trade links.

At the same time, a significant port development is taking place in the Western Region of Ghana (about 100km west of Takoradi) with the construction of the Atuabo Freeport, a greenfield port project which is being established to provide an oil and gas services complex, to support the growth of the petroleum industry in the western territorial waters. This project is being supported through a Government concession but came about through an unsolicited proposal by the Lonrho group. It is understood that the new PPP arrangements in Ghana will limit the number of projects being pursued through unsolicited proposals.

Clearly there will be a competitive tension between these port developments to the extent they overlap, however the topic of how and when Governments give undertakings to investors not to promote competing projects is often politically charged, and has in the past given rise to some high-profile (if unsuccessful) litigation by disaffected MPs.


The landmark road project in the new PPP pipeline is the Accra-Takoradi Highway Project, which will be a 245km coastal highway along national route N1. It is anticipated that the project will follow a DBFOM or BOT structure and will include toll plazas and the collection of toll revenue. A number of different development options are under consideration, ranging from US$340 million to US$629 million.

The risks associated with greenfield tolling schemes in developing countries are clearly something that both government and bidders will be aware of, and the travails of the Lekki Expressway PPP in nearby Nigeria will clearly be familiar to regional and DFI lenders. The government has indicated its willingness in principle to provide some measure of support to ensure the economic viability of the Project. We expect this to a be a matter of keen interest when the project seeks market soundings.


Many countries have recognised that rail represents the most cost-effective means of transporting heavy goods over long distance and to that extent an upgrade rail connectivity can be expected to help drive economic growth. The development of inter-city passenger networks will also help overcome substantial barriers to social mobility, which will bring its own benefits. In common with many African countries, Ghana inherited a network of rail lines from the previous colonial authorities. Much of Ghana’s original network has fallen out of service.

With this backdrop, the proposed Boankra Inland Port and Eastern Railway Line Project presents an exciting opportunity to develop Ghana’s inland connectivity. The project involves the construction and rehabilitation of 330km of cape-gauge (1067mm) railway track and associated infrastructure and rolling stock between a new inland port near Kumasi and the existing network connecting Tema Port and Accra.  Notably, most new rail developments worldwide (such as those in Nigeria, Sierra Leone, Guinea, Kenya and Ethiopia) tend to adopt standard gauge (1435mm), due to the increased stability and speed possible with the wider gauge, as well as the benefits of standardisation of rolling stock, so the decision not to follow this trend may represent a shorter-term compromise.


The Ghanaian airport sector recently received a boost with the state-owned airport operator, Ghana Airports Company Limited, securing over US$400million earlier this year from a syndicate of commercial and development finance institutions (including Ecobank and African Development Bank), which will be used to finance the construction of an additional terminal at Kotoka International Airport in Accra as well as other improvements to the rest of the airport network. The facility is structured as a receivables-backed financing, supported by the airport passenger charges, which are collected by IATA (The International Air Transport Association) on behalf of the borrower and deposited into a overseas collection account. This is the first private sector investment in Ghana’s airports sector.

Opportunities and challenges

New funding opportunities – Ghana Infrastructure Investment Fund

The Ghanaian government has also recently established the Ghana Infrastructure Investment Fund (GIIF) with the intention of coordinating and mobilising the government’s financial resources to support infrastructure projects in the country. Moneys will be pooled from a variety of sources including a portion of VAT receipts and proceeds from state-owned enterprises, as well as contributions from the annual budget and moneys raised on the capital markets. The proposed sector focus for the GIIF is largely aligned with the proposed pipeline of projects, and so one can hope to see the GIIF being promoted as part of the funding solutions, and possibly providing a useful bridge between potential foreign investors and the awarding authorities behind each scheme.

Political Support

The success of Ghana’s ambitious PPP pipeline will to a large extent be determined by the level of cross-party political support available for these schemes and the level of cooperation between departments and local authorities to work together to see the project through. A coordinated approach will assist bidders to see a level of consistency from one project to the next which will help make investment and credit decisions easier to reach.

By their nature, large infrastructure projects can be affected by a number of different factors – changes in policy, taxation, tariffs – as well as macro-economic factors. Local factors such as support (or protests) from local communities or interest groups can also help to make or break projects. The examples of rail rehabilitation projects in Nigeria and Kenya being damaged by industrial protests are stark reminders of the risks such projects face.

Viability Gap Scheme

The Ghanaian government has expressed the intention to plug the gaps necessary to allow projects to proceed and has published details of its “Viability Gap Scheme”, with the aim of supporting PPP projects that fall within the government’s national development agenda that are economically and socially justified but not financially viable.27

The intention to is provide Viability Gap Funding (VGF) which will decreases the upfront capital costs of pro-poor private infrastructure investments by providing grant funding at the time of financial close, which in turn will reduce the revenues that need to be generated by user fees, paid mostly by poor customers.28 The proposal is that VGF grants will only be disbursed after investors have committed equity to the project, and will also track debt drawdowns, so as to benefit from lender due diligence and performance monitoring.

PPP Law and Tender processes

A National PPP Policy has been in place since 2011, albeit without binding effect. A draft PPP Bill is currently before Parliament and it is expected to become law early in 2016. It is hoped that this will provide a transparent and workable framework for the procurement of the next wave of PPP projects, and also provide for a level of consistency of approach between different sectors, which would smooth the decision-making process for international investors and funders.

It is unclear at this stage whether the new PPP law will address one legal impediment that currently affects the implementation of major projects in Ghana, which is the constitutional requirement for any “international business or economic transaction” to be ratified by Parliament29, otherwise the transaction may be declared void. The Supreme Court’s judgment in the case of Attorney General v Balkan Energy Co. LLC30 in 2012 had the effect of extending this requirement to a wider range of transactions beyond that previously assumed to be the case, and it can now be assumed that this requirement will apply to any material concession agreement where a Ghanaian SPV is owned and controlled by international parties. Whilst Parliamentary approval can of course be obtained on a case-by-case basis, this is a lengthy and potentially politically-charged process, so the need for such a ratification process is cumbersome in the context of long-term concession contracts which often need be adjusted over time in order to adapt to unforeseen circumstances, and, not least, in order to raise funding.  Whilst Ghana is not alone internationally in having such a requirement, the position is an outlier; notably Uganda, who are also currently preparing their own PPP law, took conscious steps to avoid Parliament having such a power of ratification.

Boundary Dispute and Oil Price

One potential left-field risk for Ghana’s projects is the current maritime boundary dispute with Côte D’Ivoire, which is due to be decided by the International Tribunal for the Law of the Sea in 2017. Côte D’Ivoire’s claim involves adjustment of the maritime border substantially eastwards, in a way that would affect many of the petroleum concessions where potentially significant oil and gas deposits have been identified. An adverse decision could have a number of knock-on economic consequences for the government.

Conclusion – Where there’s a will, there’s a way.

Ghana is to be commended for setting out a clear pipeline of projects in different sectors, and for pushing forward with its mechanisms to promote project development through the PPP Bill, the Viability Gap Scheme and the new GIIF investment vehicle. Most important to these projects’ success will be a solid and clear commitment from across the political spectrum to see these projects through to close in a pragmatic and realistic way, which would give the private sector the confidence to invest in the longer game.

Table Footnotes

1 It was estimated that requests for Expressions Of Interest (EOI) for investors would be completed by the second half of 2015. http://www.mofep.gov.gh/sites/default/files/docs/pid/Pipeline-Projects-Ghana-PPP-11-08-14.pdf . In May 2015 a memorandum of understanding was signed between the Meridian Port Services and the Ministry of Roads and Highways https://www.delmas.com/static/communication/Attachments/Trade-Watch-Issue-51-August-2015-TEXT-ONLY.pdf.  Construction of the expansion of the road was scheduled to start in September 2015 http://graphic.com.gh/news/general-news/34255-accra-tema-motorway-to-expand-into-3-lanes.html.

2 Work was halted for a year due to unpaid contractor costs but resumed in January 2015 (http://graphic.com.gh/news/general-news/37853-work-resumes-on-accra-kumasi-highway-to-be-completed-in-12-months.html).

3 The Ministry of Roads and Highways and the Ghana Highway Authority have engaged a Transaction Advisor to conduct pre-feasibility studies on the proposed Accra-Takoradi dual carriage road. The Transaction Advisor was expected to submit their findings by the end of September 2014. A full feasibility study was undertaken which was expected to provide more detailed input for the engagement of a private sponsor. It was estimated that requests for Expressions Of Interest (EOI) for investors would be completed by the second quarter of 2015 (http://www.mofep.gov.gh/sites/default/files/docs/pid/Pipeline-Projects-Ghana-PPP-11-08-14.pdf).

4 In June 2015 it was reported that the deed for commencement of work had been signed (http://thebftonline.com/business/maritime/14380/tema-port-expansion-project-deed-signed.html).  

5 The first berth will be completed by the first quarter of 2016 (http://www.modernghana.com/news/601406/1/programme-to-expand-maritime-business-underway-pre.html).

6 Dredging of the port was due to be completed in March 2015. Once dredging was completed construction would start (http://constructionreviewonline.com/2015/01/ghana-takoradi-port-expansion-project-done-march-2015/).

7 In January 2015 it was reported that work would soon start on the project following the successful completion of negotiations between the government and investors (http://www.ghananewsagency.org/economics/work-to-start-on-boankra-port-and-eastern-railway-line-presently-85059).

8 http://www.mofep.gov.gh/sites/default/files/docs/pid/Pipeline-Projects-Ghana-PPP-11-08-14.pdf

9 Memorandum of understanding between Ghana, Togo and the African Development Bank was signed in August 2015 (http://www.ghananewsagency.org/economics/ghana-togo-sign-mou-on-water-supply-project--92861)

10 http://www.thefreelibrary.com/Sogakope-Lome+Trans+Boundary+Water+Supply+Project.-a0425071867

11 The World Bank is providing a partial risk guarantee for the project (http://www.offshore-technology.com/projects/offshore-cape-three-points-octp-integrated-oil-and-gas-project/).

12 http://www.vitol.com/ghana-vitol-and-eni-announce-transformational-gas-project-for-ghana/

13 http://www.pv-magazine.com/news/details/beitrag/ghana-finalizes-plans-for-155-mw-solar-park_100014400/#axzz3u1nibDYR

14 http://www.blue-energyco.com/africas-largest-solar-pv-power-plant/

15 http://renewables.seenews.com/news/mainstreams-225-mw-wind-farm-in-ghana-to-enter-construction-in-2016-487674

16 http://lekela.com/ayitepa-wind-farm-secures-grid-connection-with-ghana-grid-company/

17 http://www.ecreee.org/sites/default/files/editor/other/28mw_solar_pv_plant_-_ghana_wafcef_-2_-_ghana_capital_partners.pdf

18 Parliamentary approval was obtained in December 2014, this should have allowed for financial close to have taken place and construction to commence (http://graphic.com.gh/news/general-news/35453-parliament-approves-500mw-power-project.html).

19 http://venturesafrica.com/ghana-powers-up-the-largest-solar-plant-in-africa-is-coming/

20 http://endeavor-energy.com/latest_news/ghana-1000-consortium-and-shell-enter-into-exclusive-negotiations-for-lng-supply-to-the-ghana-1000-power-project/

21 It is said to be a five year project (http://worldmaritimenews.com/archives/162245/bmt-enters-africas-first-lng-import-terminal-project/)

22 http://www.africanewshub.com/news/3990202-atubo-freeport-defends-project-cost-of-us700-million

23 http://www.energydigital.com/Atuabo-Free-Port/profiles/117/Atuabo-Free-Port:-A-major-boost-to-the-Ghanaian-economy

24 https://www.ghanabusinessnews.com/2013/09/03/ghana-chinese-firm-sign-314m-deal-to-aid-transportation-on-volta-lake/

25 http://graphic.com.gh/news/general-news/46069-tamale-airport-project-to-be-completed-in-december.html

26 http://www.ghanaweb.com/GhanaHomePage/NewsArchive/Designs-for-new-international-airport-presented-277753

27 http://www.worldfinance.com/inward-investment/middle-east-and-africa/ghana-to-invest-in-infrastructure

28 http://www.pidg.org/resource-library/other-documents/taf-viability-gap-funding-vgf.pdf

29 Article 181(5) of the Constitution  of the Republic of Ghana

30 Issued on 16 May 2012