IFC and MIGA, members of the World Bank Group, have the commitment of $517 million in debt and guarantees to support Ghana’s Sankofa Gas Project, Thursday.
The integrated offshore oil and natural gas project will provide a source of reliable, affordable energy in the West African country.
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 $7.7 billion Sankofa project will be developed by Vitol Ghana and Eni Ghana, in partnership with Ghana’s National Petroleum Corporation.
IFC has committed a loan of $235 million to Vitol Ghana and arranging another $65 million in debt from the Managed Co-Lending Portfolio Program, 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.
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 Ghana’s government (per year) and provide a stable, long-term source of domestic gas that will solve Ghana’s chronic gas supply constraints
IFC Executive Vice President and CEO, Phlippe Le Houérou, said, “Ghana will require significant power generation and infrastructure to meet the growing needs of its young and expanding population.
"This project demonstrates that private capital can be mobilized on a large scale to contribute to the country’s energy security.
"Developing Ghana’s domestic natural gas resources will help the country reduce carbon emissions and provide a clean source of power for generations.”