World Bank approves $700 million for offshore gas project

The World Bank approved $700 million in investment guarantees for an offshore gas project in Ghana that will help the country address electricity shortages. It includes a $500 million payment guarantee from the bank’s International Development Association for gas purchases by the state-run Ghana National Petroleum Corp., the World Bank said in a statement from Washington. The remainder of the support is protection from the International Bank for Reconstruction and Development for private financing.

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

The Sankofa project, which is due to start producing gas as early as 2018, will supply enough fuel to generate as much as 1,000 mw of power, reducing Ghana’s reliance on about 12 Mbbl of imported oil every year, the World Bank said.

Italy’s Eni SpA and Vitol Group based in the Netherlands are carrying out exploration and “commercialization” work, said the bank.

Ghana this year battled the worst blackouts in at least eight years, with power cut to Accra, the capital, for 24 hours at a time because of a shortage of natural gas to plants and low water levels at the nation’s hydroelectric dam.