Access to healthcare is a essential to sustainable development in the wake of Covid-19 – particularly in Africa, where only 18 percent of the population are fully vaccinated. In Ghana, EKN is backing the first independently certified Social Export Credit Loan to the healthcare sector, funded by SEK (Swedish Export Credit Corporation).
Combating climate change is essential to sustainable development – but it’s not the only thing that matters. Ensuring healthy lives and promoting well-being at all ages is also fundamental to reaching the UN’s 2030 Sustainable Development Goals.
Taking steps to ensure healthy lives and well-being, the Republic of Ghana has launched an initiative to expand and develop its regional healthcare infrastructure and services. The renovation of the Effia Nkwanta Hospital in Takoradi and the construction of a new hospital in Agona will significantly improve access, in the post-Covid environment, to quality healthcare services for 3 million people in the western region, an area covering 24,000 km.
The projects are funded in a EUR 215 million agreement, consisting of two loans in favour of Ghana’s Ministry of Finance. The first, backed by EKN and funded by Swedish Export Credit Corporation (SEK), is a EUR 189 million loan with a tenor of 13 years. The second is a EUR 26 million commercial loan arranged and structured by South African Investec Bank to cover the down payment – supported by Export Credit Insurance Corporation of South Africa (ECIC). Investec is the lead arranger for both loans, Amandi is the EPC contractor, with Bluebird Finance & Projects Ltd acting as lead financial advisor.
Favourable borrowing rates
The involvement of EKN and SEK reflects the significant number of Swedish sub-suppliers participating in the project. These include medtech supplier Getinge, supplier integrator XLit, construction company Scandinavian Track Group and trading house Elof Hansson. As a result, the backing of the Swedish export credit system helped secure a highly favourable borrowing rate.
Charlotte Åkesson, Senior Underwriter at EKN comments: “EKN’s mission is to enable financing of the purchase of high-quality Swedish service and equipment. It is particularly rewarding that EKN has participated in this important project, enabling the delivery of world-class health care facilities that will make a significant improvement to the social infrastructure in the region, and which supports the UN Sustainability Goals.”
To secure Africa’s first ever financing of health care investment by a Social Loan, Acre Impact Capital acted as impact adviser to Investec and made sure the loans were fully aligned with Loan Market Association Social Loan Guidelines (2021) and eligible for an independent Second Party Opinion certifying the same from DNV. “This financing demonstrates the critical role export finance can play in delivering high impact affordable social infrastructure,” says Chris Mitman, Head of Export Finance at Investec.
“Proud to close this financing”
Brian Irvine, the firm’s Head of African Structured Debt and Trade Finance adds: “This transaction demonstrates the growing capacity of African domiciled banks and financial institutions to structure and arrange debt financing for African projects and trade. We are proud to close this financing so soon after the recent EUR 600 million western rail project.”
Once complete, the combined hospitals will include a centre of excellence for maternity, obstetrics, gynaecology, and neonatal care (NICU), with 500 beds and over 40,000 sqm of modern medical floor area and 6,000 sqm of staff housing. They will also provide a trauma and emergency unit, a burns unit, a medical imaging lab, advanced laboratory services and a catheterizationlab/angiography and chemotherapy unit. Training will be provided to physicians, nurses and paramedics as part of the project implementation.
Business in brief
EPC contractor: Amandi Investment Ltd.
Lead arrangers: Investec Bank Ltd.
Financing: EUR 185 million
EKN and sustainability
EKN always examines the sustainability effects of the projects it supports from a wider perspective by assessing inherent risks of corruption, human rights violation and other environmental, social, and corporate Governance (ESG) aspects. “Projects supported by EKN have, in other words, undergone a comprehensive sustainability analysis of all relevant environmental, social and governance aspects. This represents a quality seal that benefits lenders as well as project owners,” says Karin Wessman, Sustainability Director at EKN.