UK Export Finance (UKEF) will provide US$400 million in support for a GE Oil & Gas contract the Offshore Cape Three Points (OCTP) project in Ghana.
UKEF will provide $400 million of support to the OCTP project, including a loan under its direct lending facility. Support for the contract is a result of the memorandum of understanding signed between GE and UKEF in 2015, affirming UKEF’s support for GE and GE’s commitment to continued investment in its UK operations.
This will be UKEF’s first direct loan for a project in Africa. UKEF support will finance the specialized systems and equipment, a significant proportion of which has been sourced from the UK.
GE’s contract is worth $850 million, and entails providing subsea production systems to the project, which will develop oil and gas fields approximately 60km offshore from the western side of Ghana’s coast. Following first gas production in 2018, the new fields are expected to continuously feed Ghana’s thermal power plants for more than 20 years.
Lorenzo Simonelli, president and CEO of GE Oil & Gas, said: “This contract represents GE’s ability to invest to build local partnership, resource and infrastructure capabilities, and will utilize engineering and manufacturing expertise from the UK, across the supply chain. Export credit agency financing is an important source of support for our customers, and the MoU signed with UKEF in 2015 has helped to support this success.”
The OCTP project will develop gas reserves expected to generate an additional 1100 MW of power for Ghana, which will alleviate the country’s reliance on energy imports, providing long-term energy security and supporting Ghanaian industrial development. This natural gas project will help the country achieve its COP21 commitments for climate mitigation by displacing heavy fuel oil use with gas – equivalent to taking 1.2 million cars off Ghana’s roads each year or planting 152 million trees.
Total investment in the development of the OCTP are estimated to be $7.9 billion over the life of the project, represents the largest foreign direct investment in Ghana’s history. UKEF’s support is provided as part of a larger $1.35 billion financing package alongside that of the International Finance Corp. and Multilateral Investment Guarantee Agency of the World Bank Group, as well as commercial banks HSBC Bank plc, Standard Chartered Bank, Société Générale (London Branch), ING Belgium SA/NV, Natixis, Bank of China, Singapore Branch, Mizuho Bank Ltd and MUFG (Europe) N.V.