Skip to main content

Sankofa Gas Project receives US$700 million from World Bank


The World Bank’s Board of Directors today approved a record investment of US$700 million in guarantees for Ghana’s Sankofa Gas Project.

The Sankofa project will help address the country’s serious energy shortages by developing new sources of clean and affordable natural gas for domestic power generation.

The Board approved a unique combination of two guarantees for the Project. These are an IDA payment guarantee of US$500 million that supports timely payments for gas purchases by Ghana National Petroleum Corporation and an IBRD Enclave Loan guarantee of US$200 million that enables the project to secure financing from its private sponsors.

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

Ghana, with a population of 25 million people, has suffered macroeconomic shocks in recent years – partly due to challenges being faced by the country’s power sector. A combination of water shortages for hydropower, erratic gas supplies from external sources, and delays in the development of domestic gas resources and new power plants have led to frequent power outages that have affected the poor the most. The Government of Ghana has spent more than $500 million on fuel subsidies to the power sector in recent years – significantly draining public resources.

Developing the Sankofa Gas Project which 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 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,” said Makhtar Diop, Vice President for the World Bank’s Africa Region.

“Innovative use of the Bank’s Guarantee Program 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,” says Diop.

Ghana’s Finance Minister, Hon Seth Terkper, said the project is a game changer for Ghana and other middle income Sub-Saharan African countries, as it would help shape the country’s energy sector for the next 20 years. 

“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,” Hon. Terkper noted.

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

The Sankofa project is part of a much broader program of support by the World Bank Group for Ghana’s energy sector transformation. This has included technical assistance for energy sector reforms and the drafting of a new renewable energy law, provision of off-grid energy services for remote communities, and support to the distribution utility to improve its operations.

Today’s approval of the World Bank Guarantees is a key step — it will help pave the way for finalization and signing of the legal contracts that underpin this landmark private operation.

Credit: World Bank



Comments

Popular posts from this blog

PFM Act to guide local government authority borrowing

By: Fred Yaw Sarpong
The bill, Public Financial Management (PFM) Act 921 which has been passed into law by Parliament is to guide public institutions especially the local government authority borrowing. The law was pass on 3rdAugust, 2016
According to the law, local government authority, a public corporation or state-owned enterprise is liable for the debt and other obligations without recourse to Government, unless otherwise explicitly guaranteed by Government in accordance with this Act.
Madam Eva Esselba Mends, the Chief Economic Officer and Group Head of PFM at the Ministry of Finance told the Daily Express that the law involves a lot but it also give instruction to how state institutions can borrow especially with the  local government authority.
She mentioned that there is no specific law in place that gives direction as to what local authority can do when it comes to borrowing by the authority. Other public corporations sometimes borrow with huge amount for their operation but loca…

Tigo donates 540 tablet phones Death and Birth Registry

By: Sarpongs.blogspot.com 
Tigo Ghana has presented 540 tablets phones with internet connectivity to the Births and Deaths Registry (BDR) for the pilot phase of the automated birth registration programme.
This form parts of Tigo’s strategic focus to accelerate birth registration in Ghana through mobile technology. Tigo in partnership with UNICEF is providing this technology platform.
A statement from Tigo stated that the tablets will allow birth registration attendants from the Births and Deaths Registry to electronically capture details of all new births in 300 communities across Ghana.
The automated birth registration programme which was launched in May this year, is expected to make a significant contribution to an improved national average registration rate, an increase from 65 percent of all children under age one to at least 75 percent by the end of 2017.
According to Tigo, a successful pilot will also contribute to progress under Ghana’s National Civil Registration and Vital Statist…

Vodafone fined a record £4.6 million for IT blunder

A top-up error left pay-as-you-go customers out of pocket and complaints were mishandled
Vodafone has been fined a record £4.6 million by the telecoms watchdog forleaving thousands of customers out of pocket in a disastrous IT blunder.
Ofcom found that the operator mishandled complaints and failed to pay into the accounts of more than 10,000 pay-as-you-go customers when they topped up their credit.
The top-up error, which cost customers £150,000 over 17 months in 2014 and 2015, stemmed from the moving of 28.5 million accounts to a new billing system.Errors in billing data and price plans caused so much protest that it made Vodafone the most complained-about mobile network in Britain.The technical issues were resolved by April 2015 and all accounts are now on the new system, Vodafone said.
Lindsey Fussell, Ofcom’s consumer group director, said:“Vodafone’s failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies.”
The company says that it has ref…