IFC and MIGA commit $517m to Ghana Sankofa Gas Project

Category: Investment, Lead 305

The International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), of the World Bank Group, today announced the commitment of $517 million in debt and guarantees to support Ghana’s Sankofa Gas Project, a press release issued today December 15, 2016 and copied to ghanabusinessnews.com says.

The Sankofa project is an integrated offshore oil and natural gas project expected to provide a source of reliable, affordable energy in Ghana.

“The project will fuel up to 1,000 megawatts of power generation, helping Ghana meet its growing energy needs and displace oil-fired power generation with a clean-burning alternative,” the release says.

It indicates that the $7.7 billion Sankofa project will be developed by Vitol Ghana and Eni Ghana, in partnership with Ghana’s National Petroleum Corporation (GNPC).

“IFC has committed a loan of $235 million to Vitol Ghana and is arranging another $65 million in debt from the Managed Co-Lending Portfolio Programme, a loan-syndications initiative that enables third-party investors to participate passively in IFC’s senior loan portfolio.

The IFC financing is part of a $1.35 billion loan facility provided by commercial banks, including HSBC, Société Générale, ING, Standard Chartered Bank, UKEF, among others. MIGA has committed these commercial lenders with up to $217 million in political risk guarantees,” the release adds.

According to the release, Ghana’s government has identified the Sankofa project as one of two transformational projects that will help the country achieve its COP21 commitments for climate mitigation.

“Once it starts to produce gas in early 2018, the project is expected to reduce carbon emissions in Ghana by an estimated 1.6 million metric tons annually as gas displaces heavy fuel oil-equivalent to taking 1.2 million cars off the road each year or planting 152 million trees. Sankofa is expected to generate $2.3 billion in revenues for the government (per year) and provide a stable, long-term source of domestic gas that will solve Ghana’s chronic gas supply constraints,” it says.

The commitment by the IFC and MIGA brings the World Bank Group financing for the Sankofa Gas Project to approximately $1.217 billion, building on a $700 million guarantee package from the World Bank, it says.

By Emmanuel K Dogbevi
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