IFC Loan Supports Offshore Oil Development to Foster Economic Growth in Ghana
Accra, Ghana/Washington, D.C., July 13, 2009—IFC, a member of the World Bank Group, on Monday signed a loan agreement for $100 million with Kosmos Energy, one of the key partners developing Ghana's Jubilee field, an offshore oil and gas project that will help diversify Ghana's economy and meet domestic power demand.
IFC's senior and junior loan tranches are part of a $750 million debt package for U.S.-based Kosmos that IFC helped mobilize, primarily from commercial banks. Earlier this year, IFC signed a $115 million loan agreement with British Tullow Oil, another key Jubilee partner, bringing IFC's support for the project to $215 million. Kosmos and Tullow are independent oil and gas exploration and production companies.
The project, located in deep water some 60 kilometers off the coast of Ghana, will produce domestic crude oil, generating foreign exchange income for the country and substituting expenditures for oil imports. It is also expected to boost government revenues, providing much needed income against the background of the global economic downturn.
“IFC's support for the Jubilee project is critical for the Jubilee partners and for Ghana,” said W. Greg Dunlevy, Kosmos Executive Vice President and Chief Financial Officer. “IFC's loan at this time of tight credit markets has been key in securing commercial bank financing in parallel. Equally important, IFC is assisting us in achieving the broad stakeholder participation that we are aiming for.”
IFC is supporting Kosmos and Tullow in preparing environmental and social management plans for the project. The loans also are tied to other milestones such as management of biodiversity conservation, safehandling of waste, and emergency response procedures.
Next to oil, the Jubilee field is expected to produce gas to support about 400 megawatts of new power generation, equivalent to about 30 percentof Ghana's annual power consumption. The project also will stimulate the Ghanaian economy by purchasing goods and services locally. IFC is advising the companies on enhancing the project's benefits for local communities and stakeholder engagement.
“The Jubilee oil field is a landmark project for Ghana,” said Somit Varma, IFC's Global Head for Oil, Gas, Mining, and Chemicals. “The project will provide a new and vital revenue source in a country that has one of the best governance track records in Sub-Saharan Africa.”
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org.