IFC commits $667m funding for APM Terminal’s Tema Port project

The International Finance Corporation (IFC), a part of the Washington, D.C.-based World Bank Group, and the largest global development institution focused exclusively on the private sector projects in developing countries, has announced a $667 million financing package for the proposed deep-water container terminal at Tema Port, in Ghana.

The new port facility, which is expected to handle a throughput capacity of 3.5 million Twenty Equivalent Units (TEUs) of container annually, will serve as a new shipping and logistics hub for West Africa and inland locations. It will be operated as a joint venture partnership between the Ghana Ports and Harbours Authority (GPHA), APM Terminals, and French-based Bolloré Transport & Logistics.
A breakdown of the funding will include $195 million from IFC, and $472 million to be provided by three commercial banks including the Bank of China, the Industrial and Commercial Bank of China, and South African-based Standard Bank, along with Dutch-based development bank FMO. Given the magnitude of the investment, the financing package will represents IFC’s largest port investment and biggest infrastructure mobilisation in sub-Saharan Africa.
Statistics show that Tema, Ghana’s largest port, handled 782,502 TEUs in 2015, out of Ghana’s total traffic of 895,000. In November 2014, APM Terminals signed a Memorandum of Understanding with the Government of Ghana for the expansion of Tema Port, representing a private investment in excess of $1 billion. The agreement was finalised in May 2015.
Also, the expansion plans include the development of four deep-water berths and an access channel able to accommodate the world’s largest container ships. The project will provide over 3 million TEUs in annual throughput capacity, along with facilities for non-containerised cargo. This is as the container throughput at the existing Meridian Port Services (MPS) joint venture between APM Terminals, GPHA and Bolloré, at Tema Port stood at 646,000 TEUs in 2015.
APM Terminals is the largest port and terminal operating company in Africa by equity throughput, with 5.27 million TEUs handled in 2015. The APM Terminals Global Terminal Network operates 10 facilities in eight countries in West Africa.
IFC on the other hand, has established a leading position for promoting private sector investment in Africa. Over the last six decades, IFC has invested more than $25 billion in African businesses and financial institutions, with a current portfolio exceeding $5 billion. The IFC raises funds for lending activities through the issuance of debt obligations (bonds) in international capital markets including maintaining an AAA credit rating.