GHANA: Increasing Access to Market-Based Financing for Municipalities in the Greater Accra Area

The objective of this activity was to increase the access of local governments in the Greater Accra Area to market-based financing. The activity first assessed the legal framework for PPPs and concluded that sub-national entities, including local authorities and state-owned enterprises, are permitted to engage in PPP projects and may borrow funds for the purpose of doing so without a sovereign guarantee. The activity then assessed Ghana's financial system and the options for financing PPPs implemented by sub-national entities. The reports made several recommendations on how local governments could improve their capacity to undertake PPP projects, including strengthening revenue collection to improve their creditworthiness, increasing their understanding of PPP projects, improving procurement processes and making bidding more transparent, and using escrow accounts to improve the creditworthiness of specific PPP projects. Support was then provided to assist the Ministry of Finance and local authorities to structure a pilot PPP project. The pilot project (pedestrian footbridges) was selected because of its low complexity, the great need for the infrastructure to reduce pedestrian deaths in traffic accidents, and lessons learned from the successful implementation of similar projects in Honduras. The contracts for the footbridges were bid out in March 2013.