World Bank Grants $700mn for Ghana Gas Project

World Bank on Thursday said it would invest $700 million in guarantees for Ghana’s Sankofa gas project.

The World Bank board approved a unique combination of two guarantees for the project – an International Development Association (IDA) payment guarantee of $500 million that supports timely payments for gas purchases by Ghana National Petroleum Corporation and an International Bank for Reconstruction and Development (IBRD) enclave loan guarantee of $200 million that enables the project to secure financing from its private sponsors.

The World Bank believes the guarantees are expected to mobilize $7.9 billion in new private investment for offshore natural gas, representing the biggest foreign direct investment in Ghana’s history.

Developing the Sankofa gas project – located 60 km offshore – is expected to bring significant benefits for Ghana by fueling up to 1,000 megawatts of clean power generation, replacing polluting and expensive oil-burning electricity. Once the Sankofa field starts to produce gas in early 2018, Ghana will be able to reduce its oil imports by up to 12 million barrels a year and cut carbon emissions by 1.6 million metric tons of CO2 annually.

The exploration and commercialization of the gas will be carried out by Eni of Italy and Vitol Group of the Netherlands, in partnership with Ghana’s National Petroleum Corporation (GNPC).