Project Finance: Ghana’s Untapped Key to Infrastructure Development [ARTICLE]

“The future of Ghana’s infrastructure lies not in borrowing more, but in thinking smarter.”

Ghana’s economic and industrial growth continues to be constrained by how large-scale projects are financed. Promising projects are frequently paused or abandoned because existing financing processes require companies to secure loans with their full corporate resources, exposing their operational capital to high risk. Traditional short-term lending structures are simply not suited to long-term infrastructure and industrial investment. It is this mismatch between financing models and development needs that is quietly slowing the country’s progress.

Recent government analysis shows that Ghana’s infrastructure financing gap stands at about 2.8% of GDP, significantly higher than the 1.7% average of its lower-middle-income peers, even though the country currently spends around 5% of GDP on infrastructure. This highlights the scale of the shortfall and underscores why financing models must evolve.

Recent industry experience provides a clear indication of what is at stake. Several projects have completed feasibility assessments supporting the expansion of production capacity, with market projections showing strong demand and interest from regional distributors. Despite this commercial viability, proposed expansions are often put on hold. Local lenders require full collateral against existing assets with short repayment timelines, while international finance providers consider such projects promising but are unwilling to proceed without government guarantees. Without financing structures that recognise future project revenues rather than historic balance-sheet strength, these investments are frequently shelved. This pattern reflects how viable industrial and infrastructure opportunities across the country continue to be lost.

At a national level, this has wider implications. Ghana’s infrastructure gaps, particularly in power reliability, transportation systems, and industrial utilities, continue to affect productivity. The public sector alone cannot fund the scale of development required, particularly given rising debt pressures and limited fiscal space. At the same time, domestic institutional investors such as pension funds and insurance companies collectively manage assets worth tens of billions of cedis, yet only a small portion is channelled into long-term infrastructure. International financiers also show interest in African infrastructure, but they require structures that allocate risk appropriately and provide confidence in project repayment over time. Project finance offers a means to bridge this disconnect by allowing capital-intensive investments to proceed based on projected project cash flows rather than exhausting corporate balance sheets or public finances.

The Cenpower Independent Power Project, for instance, secured approximately US$900 million by structuring financing around the project’s output rather than depending entirely on government backing. Similarly, the LMI Holdings solar initiative in the Tema–Dawa area sourced capital based on its ability to supply energy to industrial operators over time, attracting both international and domestic funding partners. These projects illustrate that, with clearly structured agreements and transparent revenue mechanisms, significant infrastructure can be delivered without excessive reliance on state guarantees. What is crucial now is whether Ghana’s policy framework consistently supports such models beyond isolated successes.

However, this approach is not without its challenges. Project finance requires rigorous preparation, credible revenue projections, strong contractual enforcement, and capable institutions. Where these conditions are weak, risks intended for private investors can migrate back to the public sector through poorly designed guarantees or renegotiated contracts. This reality partly explains why scaling project finance has been slow: it demands discipline, technical expertise, and upfront investment in project preparation rather than quick approvals.

To unlock the full potential of project finance, policymakers will need to facilitate an environment where long-term project revenue can credibly serve as the basis for investment risk assessment. This involves ensuring greater regulatory certainty around licensing, tariff structures, and off-take agreements so investors can reliably assess contract performance. At the same time, strengthening the capacity of institutions to evaluate and structure financially viable project agreements is essential, as many projects fail to advance due to weak early-stage technical, legal, and financial preparation rather than poor economics. To attract off-balance-sheet investment, government support should be used selectively to reduce early-stage risk and improve bankability rather than fully guaranteeing project debt.

If the country continues to rely solely on traditional debt financing, infrastructure challenges will deepen, private sector expansion will stall, and job creation will lag behind economic opportunity. The risk of inaction is that Ghana will continue to watch viable projects disappear due to structural and procedural constraints rather than economic limitations. By contrast, if project finance becomes a formalised element of national policy, Ghana can unlock access to larger pools of long-term capital, promote accountability through performance-based repayment, and accelerate development without materially increasing public debt exposure.

As Ghana approaches its seventh decade as a nation, development outcomes will increasingly depend on the quality of financing choices rather than the scale of ambition alone. Reliable infrastructure, energy solutions, and industrial expansion will require funding models that reflect the long-term nature of these assets. Countries that have successfully scaled infrastructure adjusted their financing structures to support future productivity instead of waiting for larger budgets. Ghana has already demonstrated that this approach can work. The remaining task is to apply it deliberately and consistently. Whether project finance becomes a central pillar of national development policy may ultimately determine how effectively Ghana converts opportunity into sustained economic progress.

Writer: Eunice Kaanye
Reviewer: Dr. Joseph Quarshie