Ghana’s Aviation Minister Joseph Kofi Adda has said that the interest rate on the loan secured for the construction of the Kotoka International Airport’s (KIA) Terminal 3 is too much.
The Ghana Airports Company Limited negotiated a deal with an interest rate of Libor plus 8.5%. The loan was approved by a consortium of banks led by Ecobank Capital.
The loan was to help expand the facilities at the KIA to accommodate the growing number of passengers as well as increasing the number of airlines servicing the airport.
But Mr Adda said that the interest on the loan was expensive. He indicated that 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.”
He said this 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.
KIA’s Terminal 3 project was designed and built 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.
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