Sankofa gas project secures $300m funding

UK Export Finance’s (UKEF) decision to provide a $310m loan has put the final piece in the funding jigsaw to allow the development of the Sankofa gas project in Ghana.

The scheme involves a total private sector commitment of $7.9bn, making it the biggest investment in Ghanaian history. It will supply gas to 1,100 MW of new gas-fired generating capacity and more to industrial consumers.

The gas project, which is being developed by Italian firm Eni, Dutch oil trader Vitol and the Ghana National Petroleum Corporation (GNPC), involves the development of the deepwater Sankofa Main, Sankofa East, Gye Nyame, Sankofa East Cenomanian and Sankofa East Campanian fields on the Offshore Cape Three Points (OCTP) block. Located 63km offshore the Ghanaian coast, they contain both oil and an estimated 1.45 trillion cu ft of non-associated natural gas.

British export credit agency UKEF’s loan will be provided to GE, which has secured the $850m contract to provide the subsea infrastructure on the scheme. It represents UKEF’s first ever direct funding for an African project.

Makhtar Diop, the World Bank’s vice president for Africa, described the project as “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.” He added: “Innovative use of the bank’s guarantee program that helps mitigate the perception of risk and mobilises private investment can help unlock billions of much-needed financing for large-scale infrastructure projects on the continent.”

Loans have been provided by a very wide range of financial institutions, including Standard Chartered Bank and HSBC, which issued a $500m letter of credit facility to fund the investment share of the state oil company, GNPC.