UK Export Finance (UKEF), a European export credit agency, will provide $400 million in support of a GE Oil & Gas contract with Ghana’s Offshore Cape Three Points Project.
UKEF is supporting a GE Oil & Gas contract worth $850 million, which will in turn support jobs in the Aberdeen and Bristol areas. The contract for the supply of equipment for the Eni-operated project was awarded to GE in March 2015.
This is the first time a European export credit agency has supported a financing structure of this kind, and is UKEF’s first direct loan for a project in Africa.
GE Oil & Gas, which is headquartered in the UK, is 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.
Rt Hon. Greg Hands MP, Minister for Trade and Investment, said: “The Offshore Cape Three Points Project will greatly improve Ghana’s energy security. Thanks to the UK Government’s support, via UK Export Finance, and our global leadership in oil and gas, UK companies are ideally placed to support Ghana’s future development and seize the huge export potential that brings.”
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 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, and the MoU signed with UKEF in 2015 has helped to support this success.”
The project
According to UKEF, the Offshore Cape Three Points (OCTP) project will develop gas reserves expected to generate an additional 1,100MW 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 transformational 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.
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.
UKEF will provide $400 million of support to the OCTP project, including a loan under its Direct Lending Facility. UKEF support will finance the specialized systems and equipment, a significant proportion of which has been sourced from the UK.
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.