Ghana: U.K. Export Finance Supports Oil and Gas Industry

UK Export Finance (UKEF) has announced that it will provide $400 million in support for a GE Oil & Gas contract with Ghana's Offshore Cape Three Points Project

Source: 123rf

As the global economy continues to grow, so does the demand for energy resources. The global energy market is already worth trillions of dollars and it continues to grow. With that fact in mind, it is a no brainer to continue capitalise on the massive gains promised by the energy sector, including oil and gas.

Alternative energy options such as solar, wind, and nuclear also offer hugely promising growth in the near future. As one of the first independent countries in the region, Ghana is among the regional leaders in the energy sector. UK Export Finance (UKEF) is supporting the Ghanaian energy market via a General Electric Oil and Gas project worth US$ 850 million. UKEF will provide a financial package worth $400 million to this project in a first of its kind direct loan for any project in Africa.

About the GE Oil & Gas Project in Ghana:
General Electric Oil and Gas will develop underwater fields nearly 60 kilometers off the western coast of Ghana under The Offshore Cape Three Points (OCTP) project. The OCTP project will extract natural gas to feed Ghana’s thermal power plants and meet domestic energy needs for the next 20 years.

It is estimated that 41 billion cubic meters of gas and 500 million barrels of oil will be extracted under OCTP.

By utilising technical and engineering expertise from its partners in the United Kingdom, GE Oil & Gas will be able to ensure high rates of productivity and efficiency throughout the operation. GE also intends to implement modern techniques throughout the supply chain which will revolutionise existing processes within Ghana. This includes connecting the fields through specially designed sea bed systems connected via flow lines to a floating production, storage, and offloading (or FPSO) vessel. A separate dedicated pipeline to transport the natural gas to specifically constructed onshore receiving facilities will also be constructed.

The Offshore Cape Three Points project is intended to be the world’s first upstream oil and gas development scheme under a hybrid finance structure. Through the support of the UK Export Finance agency, this project will bring together funds under a direct lending facility. Other agencies contributing to the $7.9 billion investment in the OCTP include The International Finance Corporation and Multilateral Investment Guarantee Agency. A number of commercial banks including HSBC, Standard Chartered Bank, Bank of China, and Societe General will also be involved in the process.

Setting Direction for the Future:
These arrangements will set a precedent for other large scale projects within Ghana and neighbouring countries. They will also lend credibility to the local government’s ability to comply with international financing schemes and open up all sectors of the economy for foreign investment. This will have a particularly positive impact on large scale projects where specialised expertise and equipment are required. In turn, it will allow African nations like Ghana and other neighbouring countries to extract their natural resources and capitalise on a golden opportunity just in time for Africa’s projected growth boom.