The UK’s export credit agency UK Export Finance (UKEF) is to provide US$310mn for the development of offshore gas fields in Ghana, its first direct loan for a project in Africa.
The loan will be extended to GE Oil & Gas, a subsidiary of General Electric headquartered in the UK, to supply subsea production systems to the Offshore Cape Three Points (OCTP) project in Ghana.
UKEF says the loan is based on both project finance and reserve-based lending. The agency will also provide a US$90mn buyer credit guarantee.
In March 2015 GE Oil & Gas won a contract worth US$850mn to supply equipment to the gas project, which will support jobs in Aberdeen and Bristol.
Lorenzo Simonelli, president and CEO of GE Oil & Gas, comments on the deal: “This contract represents GE’s ability to invest to build local partnership, resource and infrastructure capabilities, and will utilise engineering and manufacturing expertise from the UK, across the supply chain. Export credit agency financing is an important source of support for our customers.”
Located about 60km off the coast of western Ghana, the OCTP project includes the combined development of the Sankofa Main, Sankofa East, Gye Nyame, Sankofa East Cenomanian and Sankofa East Campanian fields, by Italian oil and gas company ENI, upstream trader Vitol and Ghana National Petroleum Corporation (GNPC), Ghana’s national oil company.
The fields will contribute to the improvement of the energy matrix in Ghana and boost the country’s power availability. Production is due to start in 2018 and is expected to generate 1,100MW of electricity for Ghana.
The OCTP project is estimated to attract a total of US$7.9bn of private investment, representing the largest foreign direct investment in Ghana’s history.
UKEF’s loan and credit facility is a result of a memorandum of understanding signed between GE and UKEF in 2015. It is provided as part of a US$1.35bn financing package, which includes backing from the World Bank’s Miga and IFC and HSBC, Standard Chartered, Société Générale, ING, Natixis, Bank of China, Mizuho Bank and MUFG.