Finance Minister Dr Cassiel Ato Forson has announced a proposed €323 million financing package to address persistent water shortages and improve sanitation in three major towns in northern Ghana.
The financing arrangement, comprising €98 million in grants and a €225 million highly concessional facility, is intended to support the Northern Ghana Water and Sanitation Project, targeting Tamale, Yendi and Damongo.
Dr Forson disclosed the development in a statement posted on his X account following a meeting with the Vice-President of the European Investment Bank (EIB), Ambroise Fayolle.
According to the Finance Minister, the meeting focused on securing financing for the project, which is expected to improve access to water and sanitation services in the beneficiary communities.
“I have just concluded a productive meeting with European Investment Bank Vice-President Ambroise Fayolle on the financing package for the Northern Ghana Water and Sanitation Project,” he stated.
€323m Financing Arrangement
Providing details of the proposed financing package, Dr Forson indicated that the European Commission would contribute a €68 million grant, while Invest International, a Dutch government initiative, would provide an additional €30 million grant.
The European Investment Bank is expected to provide the largest share of the financing through a €225 million highly concessional facility.
The two grants, totalling €98 million, represent approximately 30.3% of the proposed financing package, while the EIB facility accounts for the remaining 69.7%.
The financing structure is significant because the grant component would not ordinarily require repayment, potentially reducing the government’s borrowing requirements for the project.
However, the €225 million concessional facility would constitute a financial obligation, subject to the terms of the eventual agreement.
The Finance Minister did not disclose the interest rate, repayment period, grace period or other financial conditions attached to the facility.
Tackling Water Shortages
The Northern Ghana Water and Sanitation Project is designed to address persistent water supply challenges in Tamale, Yendi and Damongo.
Dr Forson said the project would also improve sanitation across the three communities.
Although the Finance Minister outlined the financing components, he did not indicate when the agreements would be finalised or when implementation of the project would commence.
He also did not provide details of the infrastructure to be constructed, the number of people expected to benefit or the anticipated completion date.
The proposed investment, if successfully concluded and implemented, could help strengthen water and sanitation infrastructure in the beneficiary towns.
The financing package would also represent a significant commitment by European development partners towards addressing water and sanitation challenges in northern Ghana.
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