World Bank has approved $700m to be invested in Ghana’s offshore Sankofa gas project. The funds will go towards developing new sources of affordable and clean natural gas to be used in homestead. In a move that will go a long way to addressing the country’s energy shortages.
World Bank approved a combination of two guarantees, the International Development Association (IDA) Payment guarantee at $500m and the International Bank for Reconstruction and Development (IBRD) Enclave loan guarantee of $200m. IDA guarantees Ghana National Petroleum Corporation (GNPC) a timely payment for gas purchases and the IBRD loan guarantees the project a secure financing from private sponsors.
World Bank also says that the guarantees will jointly mobilize a total of $7.9bn worth of private investment. The Sankofa Gas Project is set to begin gas production at the beginning of 2018. The natural gas production will enable the country to cut down on its oil imports by up to 12 million barrels per year. It will also go a long way in curbing greenhouse gasses emission by 1.6 million tons.
Makhtar Diop, the World Bank Africa Region vice president, said: “The Sankofa Gas Project is a good example of how Africa can address its infrastructure challenges and lay the foundation for sustained economic growth by providing affordable and reliable power to its population.”
Ghana’s Minister of Finance, Seth Kerper, said: “This project is an essential element of the drive towards consolidating our middle-income status, and will help secure our natural gas resources for a more affordable and reliable power supply.
This will help boost economic activity and generate more jobs for Ghanaians. It is part of the smart financing we have been talking about, and we are very grateful to the World Bank Group for this major achievement.”
Dutch’s Vitol Group and Italy Company Eni will partner with GNPC to in carrying out the gas exploration and commercialization.