Photo by: Duane Daws
A “record” $700-million in guarantees has been secured from the World Bank for Ghana’s Sankofa gas project to advance the West African nation’s energy transformation.
The World Bank approved a $500-million International Development Association payment guarantee to support timely payments for gas purchases by Ghana National Petroleum Corporation.
A further $200-million International Bank for Reconstruction and Development enclave loan guarantee was offered to enable the project the ability to secure financing from its private sponsors.
The guarantees were expected to pave the way for the finalisation and signing of the legal contracts that underpinned the landmark private operation, while unlocking $7.9-billion in new private investment for offshore natural gas Ghana.
The country had contributed in excess of $500-million towards fuel subsidies to the power sector to mitigate the challenges that hampered the provision of power to its 25-million-strong population. These obstacles included water shortages for hydropower, erratic gas supplies from external sources and delays in the development of domestic gas resources and new power plants.
The Sankofa gas project would provide up to 1 000 MW of clean power generation when it ramped up in 2018.
The project, which formed part a broader energy-sector transformation programme, would also enable Ghana to cut oil imports by up to 12-million barrels a year and carbon emissions by 1.6-million tonnes a year.
Italy-based Eni and Netherlands-headquartered Vitol Group, in partnership with Ghana’s National Petroleum Corporation, would undertake the exploration and commercialisation of the gas project.