MIGA, a member of World Bank Group, entered into a 225-million-dollar 20-year contract to provide political risk insurance for the Floating, Production, Storage and Offloading (FPSO) vessel that would produce and process oil and gas from the Jubilee offshore oil field in Ghana on June 30.
This was contained in a statement issued by the World Bank under “Ghana’s Oil and Gas Sector-World Bank Group Support” on Thursday.
It said MIGA provided a 75-million-dollar guarantee for an equity investment in the West African Gas Pipeline Company to cover a portion of Ghana’s contractual obligations for the project.
The statement said MIGA had extensive knowledge in the oil and gas industry and since inception had issued more than 30 contracts totalling more than one billion dollars for projects in these sectors.
“MIGA, a member of the World Bank Group, is focused on promoting foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives, “it added.
The statement said International Finance Corporation (IFC) also a member of the World Bank Group, was the largest development institution focused on the private sector in developing countries.
It said in 2009, IFC provided a 100-million-dollar loan to the management of Kosmos Energy and 115 million dollars loan to the management of Tullow Oil, two of the partners developing the Jubilee Field.
The statement said IFC also had supported the project sponsors in preparing environmental and social management plans.
It said in 2010, IFC undertook due diligence to explore the possibility of financing the FPSO and IFC’s direct and mobilised financing for private sector projects in Ghana’s oil and gas sector were commercially-based and did not rely on government guarantees or below-market rate instruments from other parts of the World Bank Group.
On other World Bank Group assistance to Ghana, the statement said in response to a request from the Government, a capacity-building project with confessional IDA funding of about 30 million dollars was being prepared.
The statement said it would assist public bodies in charge of overseeing the oil and gas sector and provide support to vocational training institutions.
IBRD, another World Bank Group is in preliminary discussions to provide a loan on commercial terms to Ghana to enable Ghana National Petroleum Corporation (GNPC) acquire an equity stake in a joint-venture for the development of the associated gas from the Jubilee Field.
The statement said development of Ghana’s Jubilee oilfield had the potential to bring substantial benefits, including reliable and affordable power generation, government revenues estimated at more than one billion dollars during peak production, foreign exchange income, jobs, and stimulated demand for local goods and services to Ghana.
It said the engagement of World Bank Groups in the Jubilee oilfield supported the Government’s priority to develop its natural resources in the long-term interests of the country.
“The World Bank Group is committed to following the highest standards of governance, environmental and social practice to help maximise the development impact in all projects supported,” it added.
The statement said the World Bank was making available to Ghana its global knowledge and expertise in the oil and gas sector to help the government manage the new resources.
“IFC brings long-term capital along with private sector industry know-how and a commitment to best global best practices in private sector finance”.
“MIGA offers a range of benefits to investors seeking protection and continuity for their projects by providing political risk guarantees and dispute resolution services for guaranteed investments, “the statement added.