The World Bank has sanctioned a record investment of $700 million in guarantees for Ghana's Sankofa Gas Project which will help address the country's drastic energy shortfall by developing new sources of clean and affordable natural gas.
The board sanctioned a unique combination of two guarantees for the Project – an IDA Payment guarantee of $500 million that supports timely payments for gas procurement by Ghana National Petroleum Corporation (GNPC), and an IBRD Enclave Loan guarantee of $200 million that enables the project to secure funding from its private sponsors.
The guarantees would mobilize new private investment of $7.9 billion for offshore natural gas, representing the largest Foreign Direct Investment (FDI) in Ghana's history.
Developing the Sankofa Gas Project, sited 60 kilometres offshore would significantly benefit Ghana by fueling up to 1,000 megawatts of clean power production o replace polluting and costly oil-burning electricity.
Once the Sankofa field starts producing gas in early 2018, Ghana will be able to decrease its oil imports by up to 12 million barrels a year and reduce carbon emissions by 1.6 million metric tons of CO2 annually.
Makhtar Diop, Vice President for the World Bank’s Africa Region, 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. Innovative use of the bank’s Guarantee Programme that helps mitigate the perception of risk and mobilizes private investment can help unlock billions of much-needed financing for large-scale infrastructure projects on the continent."
The board sanctioned a unique combination of two guarantees for the Project – an IDA Payment guarantee of $500 million that supports timely payments for gas procurement by Ghana National Petroleum Corporation (GNPC), and an IBRD Enclave Loan guarantee of $200 million that enables the project to secure funding from its private sponsors.
The guarantees would mobilize new private investment of $7.9 billion for offshore natural gas, representing the largest Foreign Direct Investment (FDI) in Ghana's history.
Developing the Sankofa Gas Project, sited 60 kilometres offshore would significantly benefit Ghana by fueling up to 1,000 megawatts of clean power production o replace polluting and costly oil-burning electricity.
Once the Sankofa field starts producing gas in early 2018, Ghana will be able to decrease its oil imports by up to 12 million barrels a year and reduce carbon emissions by 1.6 million metric tons of CO2 annually.
Makhtar Diop, Vice President for the World Bank’s Africa Region, 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. Innovative use of the bank’s Guarantee Programme that helps mitigate the perception of risk and mobilizes private investment can help unlock billions of much-needed financing for large-scale infrastructure projects on the continent."