Deutsche Bank has closed two loans to the government of Ghana, collectively worth €203mn, to finance health and transportation projects.

The loans, extended to the Republic of Ghana, are 95% covered by the African Trade Insurance (ATI) agency, a multilateral trade credit insurer. It is the first time the agency has supported a transaction in Ghana.

Both loans, which have a tenor of 10 years, are structured according to the newly launched global loan market associations’ social loan principles and are also linked to the UN Sustainable Development Goals, a Deutsche Bank spokesperson says.

The financing covers a €55mn loan for two new trauma hospitals in the southern districts of Obuasi and Anyinam, a new emergency department in the town of Enyiresi and the rehabilitation of Obuasi’s health centre.

A further €148mn has been extended for upgrades to two roads. The first is a road from Tarkwa to Nkwanta, which passes close to the port of Takoradi in Ghana’s southwest. The artery is an important connection between the area and Ghana’s neighbours, the bank says in a July 7 statement.

The second road, a 40km stretch between the towns of Bechem and Akumadan, “will bring economic benefits to communities in the surrounding areas, which mainly depend on agricultural production for their livelihoods”, Deutsche Bank says.

“We are extremely pleased to be able to support the Republic of Ghana on critical infrastructure and health development investment initiatives through this financing and to have structured the country’s first ATI-backed transaction,” says Maryam Khosrowshahi, the bank’s chairperson of supranational, sovereign and agencies origination and co-head of Africa coverage.

“Infrastructure investment and development will remain a critical engine to support sustainable growth and employment.”

Benjamin Mugisha, ATI’s chief underwriting officer, says: “Investment in infrastructure is a necessary requirement for growth and a long-term asset in sustainable growth. Africa must invest in infrastructure development not only for sustainable economic development but also to create jobs that have been largely affected by the Covid-19 pandemic.”

The deal comes just over a week after Deutsche Bank announced it is acting as the mandated lead arranger (MLA) on two syndicated loans, collectively worth €600mn, to Ghana’s finance ministry to finance the construction of 100km of railway from Takoradi Port to the Huni Valley.

The first loan, of €523mn, covers the bulk of the construction costs and a second loan of €75mn covers the down payment on the financing.

The loans, announced on June 29, are backed by Sweden’s export credit agency, EKN, the Swedish Export Credit Corporation (SEK) and the Export Credit Insurance Corporation of South Africa (ECIC).

Investec acted as structurer and arranger of the ECIC facility and original lenders were Investec, Rand Merchant Bank, Nedbank’s London branch and Sanlam life Insurance Limited.

The project is Ghana’s biggest investment in rail infrastructure since its independence from the UK in 1957, finance minister Ken Ofori-Atta said.

“The Western Railway line is key to the haulage of agricultural produce and minerals from the middle belt to Takoradi Port in the south of Ghana,” he said. “The completion of the line will boost economic activities along the corridor and will reduce cost and time of transporting goods and passengers between the two ends.”

Werner Schmidt, global head of structured trade and export finance for Deutsche, said the transaction “will help strengthen Ghana’s economic growth by increasing both freight and passenger connectivity between the different regions in the country but also serves transportation of different mineral deposits”.

“The new standard gauge line will create job opportunities, help the environment and improve community safety by reducing the number of vehicles on the roads.”

In late June the Ghanaian government also announced a €280mn syndicated loan for upgrading a 64km section of road, this time led by Standard Chartered. The bank said it was its first financing to be structured according to the social loan principles.