Posted on September 6, 2016
Meridian Port Services (MPS) has secured the required financing to execute the Tema Port Expansion Project, enabling the development of an ultra-modern state-of-the-art port facility at Ghana’s primary commercial hub.
The project, valued at USD1.5billion, in addition to serving Ghana, will also expand trade flows and links across West Africa.
Meridian Port Services Limited is a joint venture between the Ghana Ports and Harbours Authority and Meridian Port Holdings Limited, with Bolloré Transport & Logistics and APM Terminals as the two main shareholders.
“A vast continent, with a rapidly growing population, Africa is still significantly under-represented in world trade, currently accounting for less than 5% of global container trade, but the establishment of modern port infrastructure such as this Tema Port expansion will help link African markets to the global logistics chain and promote new trade opportunities and economic growth,” stated APM Terminals CEO, Kim Fejfer.
MPS is executing the project within the GPHA Master Plan for the development of Tema Port, and building upon its success and achievements under the Concession Agreement that was granted in 2004, resulting in this latest massive expansion of Tema Port’s capacity and infrastructure.
Philippe Labonne, The Director General of Bolloré Transport & Logistics, indicated that “the new port infrastructure, and its future expansions, will propel Ghana into the global best in class, which will improve Ghana’s competiveness, facilitate trade growth and improve tax collection”.
He said the expanded port will also result in increased foreign exchange earnings through servicing international shipping lines in the port.
The project will allow Tema Port to accommodate some of the world’s largest container ships, and improve cargo handling services and capacity.
These improvements will enhance the Port’s competitiveness, and position it as a leading maritime hub in the West African region.
The immediate cash flow need of the US$1.5 billion port development is $1 billion. MPS has signed a $667 million financing package with the International Finance Corporation (IFC), a member of the World Bank Group, while the MPS shareholders will provide the rest of the funding as fresh equity amounting to $333 million.
The financing package for the construction of a new Port in Tema represents IFC’s largest port investment and biggest infrastructure mobilization to date in Sub-Saharan Africa.
It includes $195 million from the IFC’s own account and $472 million from three commercial banks: the Bank of China, the Industrial and Commercial Bank of China, and Standard Bank, as well as the Dutch development bank, FMO.
The IFC is the largest global development institution specializing in private sector investment in emerging markets.
PS has awarded the marine construction contract to China Harbour Engineering Company Ltd (CHEC), and AECOM Professional Services (Ghana) Limited, to oversee the construction.
CHEC is a Global Fortune 500 company with more than 60 branch offices and subsidiaries serving in 80 countries around the world.
AECOM will provide design and procurement management services prior to the award of construction contracts, and then will supervise the construction of all of the port expansion facilities.
Commenting at the press conference to announce the signing of the project finance agreement and the awarding of the marine contact for the expansion project, Mr. Richard Anamoo, Director General, Ghana Ports & Harbours Authority said “This expansion project takes the dream of our founding father Osagyefo Dr. Kwame Nkrumah to the next level and will remain for future generations to benefit from. Tema Port, in conjunction with Takoradi Port will enhance GPHA’s contribution to the economic growth of our sub region.”
Mohamed Samara, CEO OF Meridian Port Services stated, “This project clearly displays the strong commitment of MPS in the drive towards improving Ghana’s competitiveness as a preferred destination for international trade and investment,” adding, ”Bigger vessels means reduced freight charges, with significant savings and a tremendous benefit to the shipping community of Ghana.”
Mr. Samara noted that at present, the largest vessels which can dock at Tema Port are WAFMAX (West African Maximum Vessels) which can carry between 4,500 and 5,000 container Twenty-Foot Equivalent Units (TEUs). The impending expansion will, among other things, increase the depth of the harbour, and add 4 deep-water berths, a breakwater and a new access channel, enabling to port to accommodate vessels of up to 20,000 TEU capacity.
Dr. Alhaji Asoma Banda, the Chairman of the MPS Board, said the project will also generate a vast increase in employment opportunities in the country. The expansion works will create around 5,000 direct jobs with industry experts estimating that the economic impact of such new infrastructure will translate into approximately 450,000 new jobs.
Construction of the harbour expansion project will begin on 1st October 2016and is projected to be completed by 4th Quarter of 2019.
Port expansion gains
The $1.5 billion project, which will take close to four years to complete, will involve the building of four deep water berths and an access channel to accommodate larger vessels with high capacity equipment.
This will create the largest cargo port in West Africa, and one of the best in Africa, with a capacity of 3.5 million 20-foot equivalent unit (TEU) per annum.
The Ghana Ports and Harbours Authority has said about 5,000 jobs will be created as a result of the project.
The expansion work, the first of its magnitude since the port’s construction in 1962, will also come with a railway terminal for the movement of containers by rail to and from the port.