Standard Chartered has penned a UK Export Finance (UKEF)-backed financing agreement with the Ghanaian government, to support the construction of a new hospital in the country by a UK-based firm.

As part of the deal, Ghana’s ministry of finance is borrowing a total of €78mn to support the design, construction and equipping of the new Eastern Regional Hospital in Koforidua.

Funding will in turn be provided to a UK-based joint venture company – formed by two French-headquartered engineering and contracting firms, Tyllium and Ellipse Projects – which signed a €70mn commercial contract with the Ghanaian government for phase one of the project, a 285-bed hospital, in July. Phase two will potentially expand the capacity to 600 beds.

Tyllium notes in a statement that this is its first project in Ghana to be delivered through its UK supply chain.

Standard Chartered acted as sole lead arranger and original lender, and will provide a €17.6mn commercial loan with a tenor of five years. The majority of the financing will come from a 13-year UKEF facility, worth €60.2mn, which is divided into two tranches – a direct loan and a buyer’s credit facility.

Global law firm Sullivan served as transaction counsel through a team led by partner Mark Norris, with local legal advice provided by ENSafrica.

Ed Harkins, managing director at consultancy firm GKB Ventures, which acted as Tyllium’s export credit agency (ECA) advisor, says the direct loan tranche tapped  “the very favourable fixed rate funding at the prevailing OECD CIRR [commercial interest reference rate]”.

He adds: “The direct loan was essential to ensuring that this vital health project could be funded on affordable terms during what was an extremely volatile funding market.”

The deal follows on from Ghanaian President Nana Akufo-Addo’s pledge in April to build 94 new hospitals within a year, in response to growing fears surrounding the health impact of the coronavirus pandemic.

To date the number of confirmed Covid-19 cases in the country has risen to 32,437, and 161 have died, according to the latest data from the World Health Organization.

Ghana’s government has had to turn to the International Monetary Fund (IMF) and the World Bank for financial support in recent months as it braces for the accompanying economic blow.

In April, the IMF moved to provide a package of US$1bn in emergency funds, while the World Bank has provided US$100mn to support Ghana’s coronavirus response.

On the back of plunging oil prices, tightening financial conditions and dampened domestic activity – in the wake of Covid-19 containment measures  –  the IMF forecasts the country’s growth will slow from 6.1% in 2019 to 1.5% this year.