On October 25, 2012, MIGA issued guarantees totaling $179.2 million covering an equity investment and a shareholder loan by Abengoa Water Investments Ghana, BV of the Netherlands; an equity investment and a shareholder loan by Daye Water Investment (Ghana), BV of the Netherlands; and a non-shareholder loan and an interest rate swap agreement by Standard Bank of South Africa [1]for the Seawater Desalination Project in Ghana.
The coverage is against the risks of transfer restriction, expropriation, breach of contract, and war and civil disturbance. The tenors are 20 years for the equity investments, 14 years for the shareholder loans, and 12 years for the non-shareholder loans (including interest and swap).
The project involves the construction and operation of a seawater desalination plant in Accra by Befesa Desalination Developments Ghana Ltd, a joint venture company of Abengoa Water Investments Ghana, BV; Daye Water Investment (Ghana), BV; and their local partner Hydrocol Ltd. The plant will be built on a 25-year build-own-operate-transfer (BOOT) basis and is expected to supply 60,000 cubic meters of potable water per day to the residents and businesses in the project area.
Accra is one of the major cities in Ghana that is experiencing rapid urbanization and population growth. Many residents in the city lack access to piped or safe water, and many old settlement areas and urban suburbs are facing water shortages. The project will provide potable water to up to 500,000 residents in the Teshie-Nungua catchment of Accra and help meet some of the immense need resulting from rapid urbanization. It will also improve the security and quality of the water supply. The project will generate other development impacts, such as the introduction of seawater treatment technology and increased employment and government revenues.
The project supports MIGA's strategy of promoting south-south investments, investment in complex infrastructure projects, and investments in countries eligible for assistance from the International Development Association.
[1] The guarantee for non-shareholder loan and an interest rate swap agreement by Standard Bank of South Africa was cancelled on December 31, 2023 and October 24, 2024.
