A multi-million business deal in the time of COVID-19

BUSINESS CORRESPONDENT

THE government of Ghana and a South Africa company have proved that major business deals can be made even during the time of a worldwide health disaster brought by the COVID-19 pandemic.

Freight and Rail company Thelo DB has signed an agreement with Ghana to build a 217 km rail network – the Ghana Western Corridor Railway Line project – that will transport natural resources, especially bulk commodities such as bauxite, iron ore and agricultural produce such as cocoa. 

Signatories to the deal hope that the multimillion dollar deal will encourage African private sector investment and finance provision for sustainable railway services.

Thelo DB believes that the agreement will bring the much needed boost for the Africa Continental Free Trade Agreement (AfCFTA), after fears that the AfCTA will fail to meet its deadline to commence this year because of COVID-19. 

The company says that Ghana is an important commercial centre in West Africa’s economy due to its natural resources, energy opportunities and arable land. Its economy is one of the most stable on the continent, with reported growth of around 7% in 2019.  

 Recognising the urgent need for efficient, effective transportation and logistics solutions, a Memorandum of Understanding signed between the Government of Ghana, Thelo DB and Transtech Consult Limited, mandates Thelo DB to develop, design and engineer the new railway line. TheloDB will also modernise the existing line, maintain it, train and develop skills of the citizens of Ghana.

“We are honoured to have the opportunity to work with the Government of the Republic of Ghana and our partners in developing this critically important trade corridor.  This valuable collaboration provides Thelo DB with the opportunity to mobilise capital, as well as excellent railway sector expertise and experience for the benefit of the people and economy of the Republic of Ghana.  We are excited by the prospect of delivering on this critically important initiative, which in turn will serve to catalyse the modernisation of Ghana’s railway sector, enhance trade, investment, regional integration, job creation, infrastructure and economic development, ”said Thelo DB chairman Ronnie Ntuli

Ntuli said this is the start of several infrastructure development projects that TheloDB is aiming to drive with the help of  Africa Export Import Bank (Afreximbank). The two parties signed a MoU during the Africa Investment Forum of 2019, where they agreed to collaborate to support the modernisation of Africa’s railway sector, to promote trade and investment, as well as economic and skills development. 

Afreximbank will facilitate the financing towards preparation and implementation, as well as its structuring through its Advisory Services.