Standard Chartered has signed its first ever financing pact that has been specifically structured to comply with the recently published Social Loan Principles (SLP).

The transaction, a €280mn export credit agency (ECA)-backed finance agreement with the Ghanaian government to support the development of a highway corridor project by a German-based firm, marks the first time a social loan has been structured not only in Ghana, but on the wider African continent, the bank says.

The financing is backed by Euler Hermes, and Inzag Germany, a client of the bank, is the chosen engineering, procurement and construction contractor. Standard Chartered is acting as bookrunner, mandated lead arranger, structuring bank, social loan co-ordinator, original lender and agent.

Also in the syndicate are Raiffeisen Bank International, which came in as lead arranger and original lender. DZ Bank, Kommunalkredit and Nedbank joined as mandated lead arrangers and original lenders.

The funding will cover a 64km intersection of the new Ghana Eastern Corridor which, when completed, will connect the country’s largest port, Tema, with the town of Kalungugu on the country’s northeastern border with Burkina Faso. The Ghanaian government says that the upgraded route will positively impact the lives of around 500,000 local residents from underserved populations. It will drive employment opportunities and trade, providing shorter access to the port of Tema and linking regions within Ghana and also neighbouring countries. Additionally, the bank says that the intersection will improve road safety and better access to healthcare and other essential services.

Launched in May this year by the Loan Market Association (LMA), Asia Pacific Loan Market Association (APLMA) and the Loan Syndications and Trading Association (LSTA), the SLP are a set of voluntary recommended guidelines for lending that mitigates social issues and challenges or achieves positive social outcomes. According to Standard Chartered, this new financing is eligible under the SLP because of its objective to improve Ghana’s basic transport network, which is categorised as affordable basic infrastructure. The project will also contribute towards meeting the United Nations’ Sustainable Development Goal 9, which relates to industry, innovation and infrastructure.

“We are proud to build on our strong relationship with the ministry of finance [in] Ghana to deliver a bespoke ECA-backed solution to enable the development of this critical infrastructure project. We are equally excited to have signed the first social loan in Sub-Saharan Africa,” says Desislava Radeva, director of structured export finance at Standard Chartered.

The transaction is the sixth ECA-supported deal in Ghana arranged by Standard Chartered in the past 12 months, with a total of just over €560mn of financing being committed by the bank to the country’s transport and healthcare infrastructure in that time period.