Business News of 2014-07-11

CAL Bank signs US$28.5m deal with Proparco

CAL Bank and Proparco, a subsidiary of Agence Française de Développement (AFD), have signed an unsecured US$28.5million Tier II loan facility agreement.

Frank Adu Jnr, Chief Executive Officer of the bank, said the signing of this agreement further strengthens the relationship between the two institutions which began over 15 years ago.

“This agreement attests to the confidence Proparco continues to repose in the performance and leadership of the bank as a leading player in the Ghanaian banking sector.

“The achievement of this planned strategic milestone in our capital plan will enable us to continue with our sterling performance of the past three years, strengthen our financial position and enhance shareholder value,” he said.

Mr. Adu added that the management and staff will continue to deliver the performance CAL has come to be recognised for and associated with.

The bank and Proparco have been partners since 1999, when they first signed a loan agreement. “We have supported the bank with four credit facility agreements and as a shareholder since 2012. Proparco is proud to be part of this success story,” said Julien Lefilleur, Regional Director for Proparco in West Africa.

“We are convinced that local banks such as CAL Bank have a leading role to play in development of the Ghanaian economy. Over the past 20 years, Proparco has been instrumental in providing competitively priced medium-term credit lines for onward lending to CAL’s corporate clients and SMEs.”

This facility will allow CAL Bank to pursue it growth trajectory and continue to finance the Ghanaian private sector and, more globally, it will foster long-term investment in the country through showing the community of international investors that Ghana’s banking sector has sound fundamentals and encouraging prospects.

Proparco, to date, has injected over US$70million into the financial service sector in the country. As a development finance institution, Proparco offers a wide range of long-term financial instruments in the form of loans, equity investment and guarantees.

In sub-Saharan Africa, Proparco has provided support to the private sector to the tune of €350million in 2012. This figure is almost 50 percent of its annual funding.