DLA Piper has advised HSBC France and Standard Chartered Bank (as lenders) in respect of their USD 500 million letter of credit issuance facility made available to the Ghana state oil company, Ghana National Petroleum Corporation (GNPC). The letter of credit facility will support GNPC's role in the development of the Sankofa Gas Project in Ghana.
The project is supported by the World Bank and aims to develop offshore natural gas located in deep water 60km offshore of Western Ghana. The gas from the project will fuel up to 1,000MW of domestic power generation (about 40% of Ghana’s currently installed generation capacity). This will help improve the reliability of power services in Ghana, replacing the current use of expensive, polluting heavy fuel with cleaner and more affordable gas resources.
DLA Piper advised the lenders on all aspects of the credit arrangement, including the letter of credit and LC issuance facility with GNPC and on in respect of a guarantee provided by the International Development Association (IDA), a member of the World Bank Group in favour of the lenders. The guarantee is the largest of its kind to be granted by the World Bank.
The World Bank is supporting the Sankofa project through a unique combination of IBRD and IDA guarantees. This innovative mix, for a total of USD 700 million, will help mobilize USD 7.9 billion by the private sector.
Charles Morrison, Global co-chair of the Finance and Projects Group at DLA Piper, who led on the deal for the firm, said: "This project will change the face of power generation in Ghana and help to restore capacity to its struggling energy sector. Transforming local resources will increase electricity access and in turn have an important impact on the macro-economy by attracting much needed foreign direct investment. We are very pleased to be involved in such a crucial development and wish the project success."
The DLA Piper team was led by Charles Morrison who was assisted by senior associate William McCann and associate Lauren Kelsall.