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Business News of Wednesday, 6 March 2019

Source: citinewsroom.com

Interest rate on loan for KIA Terminal 3 project expensive – Kofi Adda

Ghana’s Aviation Minister Joseph Kofi Adda has described the interest rate for the loan secured for the construction of the Terminal 3 at Kotoka International Airport as too much.

In 2015, Ghana Airports Company Limited m interest rate of Libor plus 8.5%.

The loan was approved by a consortium of banks led by Ecobank Capital.

The Terminal 3 project at the time was meant to expand the facilities at the Kotoka International Airport to accommodate the gradually increasing number of passengers as well as increasing the number of airlines servicing the airport.

But while giving his keynote address at the sod-cutting ceremony for the construction of the Ghana Civil Aviation Authority’s New headquarters building and the Kotoka International Airport Northern Apron Project today, Tuesday, Mr. Kofi Adda said the expensive nature of the credit facility is negatively affecting the Ghana Airports Company Limited.

“The credit facility for Terminal 3 project which attracted interest rate of Libor plus 8.5% at the time was extremely high and now a few years after, it still has the effect of what one might say is amounting to strangulating the Ghana Airport Company Limited by preventing it from taking up more projects freely as its revenues are being held in escrow to service and retire the loan. The government has had to renegotiate the interest down to Libor plus 5% which is still not enough and so we continue to look for ways to bring it down even lower.”

Commissioning of Terminal 3 postponed

The new Terminal 3 project was a design and build concept undertaken by Turkish construction company Mapa Construction MNG Holding.

In September 2015, the African Development Bank (AfDB) approved a $120m loan with a tenor of up to 15 years for the project.

It was the first private-sector investment made by the bank in Ghana’s transport sector.

President Akufo Addo was expected to officially inaugurate the facility for September 15, 2018 but it was postponed indefinitely

Minority questions decision to postpone commissioning of KIA’s Terminal 3
The Minority in Parliament at the time questioned the government’s decision to indefinitely postpone the official commissioning of the newly constructed Terminal 3.

The Minority spokesperson on Foreign Affairs, Samuel Okudzeto Ablakwa in a write-up bashed government for the postponement.

“As Ranking Member on the Foreign Affairs Committee of Parliament, I am terribly worried about what this pettiness does to brand Ghana and the ramifications for future strategic partnerships with the international business community with its resultant effect on the already struggling Ghanaian economy. And as for our official ties with the United Arab Emirates; if what I am picking up is exactly the case, then we must begin to tighten our seat belts for the turbulence ahead in our diplomatic relations, Ablakwa said in an article on the matter.”