The banks said that the facility will guarantee GNPC’s payment obligations to energy companies Vitol and ENI related to the sale of gas to be extracted from the Sankofa field, off the coast of Ghana, and piped onshore for both power generation and industrial and domestic consumption. GNPC will have a 20 per cent stake in the project.
“The Sankofa integrated oil and gas project will be Ghana’s third operating field in quick succession. Gas from the field will provide baseload fuel to generate about 1,100 MW of electricity in Ghana for 15 years,” Alexander Mould, Acting Chief Executive of GNPC, said.
HSBC France is acting as agent on the stand-by credit facility, and co-issued $250 million alongside Standard Chartered Bank. Total tenor for this transaction is up to 17 years—a two year commitment period prior to production, followed by 15 years of effectiveness.
HSBC and Standard Chartered Bank’s commitment in the transaction is covered by the International Development Association (IDA), a member of the World Bank Group, with the guarantee as the largest of its kind to be granted by the World Bank. Law firm DLA Piper provided legal assistance to the banks.
The project is expected to be transformational for Ghana’s economy, by significantly increasing its power availability. The gas piped onshore from Sankofa field will be mainly used for local consumption and possibly re-exported to adjacent countries, the banks and GNPC said in a joint statement.
“Infrastructure and Energy will be the key catalysts to realising Africa’s growth potential in the coming decades. The structure of this facility can serve as a launch pad for attracting greater investment capital to close Ghana’s infrastructure financing gap,” KwekuBeduAddo, Standard Chartered’s Regional CEO for Ghana, Sierra Leone and The Gambia said.