The European Investment Bank (EIB), the European Union's long-term financing institution, is providing EUR 9 million from risk capital resources (1) for medium term financing to the leasing sector in Ghana.
The loan will be used for financing equipment investments in the industrial, agro-industrial, mining, transport, tourism and related service sectors and possible micro-lease operations.
The participating leasing companies are :
- Leasafric Ghana Ltd.
- General Leasing & Finance Company Ltd
- Ghana Leasing Company Ltd
The three leasing companies constitute nearly all of Ghanaian leasing activities.
By making long term funds available at sustainable costs, the loan aims at encouraging new investments and to stimulate employment and economic activities across a wide range of sectors. The loan also supports a more efficient financial market as it will encourage competition among Ghanaian leasing companies and deepen the range of financial products available to investors.
The facility is targeted at providing medium term financing for productive equipment for the domestic and export oriented industries, and also trigger SME investments. The Leasing Companies will pay attention to assessing environmental impact; all investments financed under the loan will comply with the legal framework in Ghana and be acceptable in to the Bank according to a set of agreed assessment guidelines.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects which further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union. The Fourth Lomé Convention was concluded in 1989 for a duration of 10 years and is accompanied by two Financial Protocols spanning the periods 1991-1995 and 1996-2000. The total financial package available under the second Protocol amounts to EUR 14.6 billion, consisting of EUR 12 billion in grant aid from EU Member States, EUR 1 billion in risk capital from the European Development Fund (EDF) and managed by the EIB, and up to EUR 1.6 billion in the form of loans from the EIB's own resources.
(1) The EIB manages under mandate part of the European Development Fund (EDF), constituted by contributions from EU Member States, which it uses primarily for risk capital operations. The Bank's own resources are raised on the international capital markets.