IFC and MIGA, members of the World Bank Group, have committed $517m in debt and guarantees to support Ghana’s Sankofa Gas Project, an integrated offshore oil and natural gas project.

The $7.7bn Sankofa project will be developed by Vitol Ghana and Eni Ghana, in partnership with Ghana’s National Petroleum Corporation. 

IFC has committed a loan of $235m to Vitol Ghana and arranging another $65m in debt from the Managed Co-Lending Portfolio Program, a loan-syndications initiative that enables third-party investors to participate passively in IFC’s senior loan portfolio. 

The IFC financing is part of a $1.35bn loan facility provided by commercial banks, including HSBC, Société Générale, ING, Standard Chartered Bank, UKEF, among others. 

MIGA has committed these commercial lenders with up to $217m in political risk guarantees.   

MIGA’s guarantees will support Vitol Ghana’s commercial borrowing needs for the project and will be issued for up to 15 years, against the risks of Transfer Restriction (including Inconvertibility), Breach of Contract, Expropriation, and War and Civil Disturbance.

“MIGA’s political risk guarantee is a key part of the World Bank Groups’ long-term commitment to serve Ghana’s rising demand for energy. Moreover, the natural gas from the Sankofa Project underpins the nation’s transition to a low-carbon future,” said MIGA Executive VP and CEO Keiko Honda.

The project will fuel up to 1,000 megawatts of power generation, helping Ghana meet its growing energy needs and displace oil-fired power generation with a clean-burning alternative. 

Ghana’s government has identified the Sankofa project as one of two transformational projects that will help the country achieve its COP21 commitments for climate mitigation. 

Sankofa is expected to generate $2.3bn in revenues for Ghana’s government (per year) and provide a stable, long-term source of domestic gas that will solve Ghana’s chronic gas supply constraints

Phlippe Le Houérou, IFC Executive VP and CEO, said: “Ghana will require significant power generation and infrastructure to meet the growing needs of its young and expanding population.” 

“This project demonstrates that private capital can be mobilized on a large scale to contribute to the country’s energy security. Developing Ghana’s domestic natural gas resources will help the country reduce carbon emissions and provide a clean source of power for generations,” he said.

With today’s announcement, IFC and MIGA support brings World Bank Group financing for the Sankofa Gas Project to approximately $1.22bn, building on a $700m guarantee package from the World Bank announced last year that will help Ghana’s National Petroleum Corporation ensure timely payments for gas purchases and that has enabled the project to secure financing from its private sponsors.

Ian Taylor, CEO of Vitol Group, said: “This is a transformational project for Ghana at an important time. The World Bank Group’s involvement, including financing from IFC and MIGA, is enabling Ghanaian gas to be used for the benefit of Ghana’s economic development.  We are pleased and proud to be part of this project.”