Development set to reduce heavy fuel oil use, improve gas supply security, cut energy generation costs and significantly cut Co2 and sulphur dioxide emissions
PIDG Company, the Emerging Africa Infrastructure Fund (EAIF) is lending US$31 million over 10 years to Access LNG B.V., a provider of specialist floating LNG infrastructure, to support the construction of a new Liquid Natural Gas (LNG) storage and regasification facility at Tema port in Ghana. Financial close was achieved on 16th November.
Tema is home to a number of Ghana’s largest power stations and to industry that relies on energy from them. The new facility enables thermal power generators to move from burning Light Cycle Oil (LCO) and Heavy Fuel Oil (HFO) to using natural gas, which is up to 30% cheaper, produces 30% less Co2 and almost no sulphur dioxide, which is the cause of acid rain. Industrial users have welcomed the development and the flexibility and reliability of supply that the LNG Terminal will deliver.
Construction of the Floating Regasification Unit and the Floating Storage Unit are both at advanced stages. Delivery of the vessels is expected before the end of the year. EAIF’s loan is part of the financing for the Floating Regasification Unit (FRU) which will be integrated with a Liquid Natural Gas (LNG) carrier serving as a Floating Storage Unit.
The fixed infrastructure element of the project, was financed under a separate financing package, consists of a breakwater, mooring facilities, a subsea pipeline and an 8km onshore pipeline to take the gas from the port to Tema’s industrial area.
“The new terminal at Tema is an innovative approach to securing reliable and cost efficient gas supply. The investment by EAIF will contribute to reducing carbon emissions, contributing to Ghana’s long-term energy needs and strengthening its economic stability and economic development efforts. The project gives local and international power and industrial sector investors added confidence in the future of the country, which is good for jobs, good for business, good for communities and good for Ghana,” Martijn Proos, a Director at EAIF’s managers, Ninety One, stated,
To continue growing its economy and meet the needs of its people, Ghana needs to ensure it has reliable sources of affordable natural gas that will minimise supply failures, contribute to national competitiveness and stimulate investment. The new Tema facility answers Ghana’s need for greater fuel security and optimal supply. The project will reduce the cost of power generation for Ghana’s power sector, provide an adequate margin of fuel reserves and benefit the ongoing expansion of the country’s electricity and gas grids.
The construction phase of the Tema project began in 2018. Some 600 people are involved in creating the facility. The majority were locally recruited. 30 to 45 permanent jobs will be created when the facility becomes operational.
Access LNG B.V was established as a joint venture between Helios Investment Partners, a leading Africa focused private investment firm and Gasfin Development SA, a pioneer in LNG infrastructure, to develop and operate new LNG facilities for developing markets. Delivering the floating infrastructure for the new LNG facility at Tema is the first project for the joint venture.
“We have worked successfully with EAIF over many years on the financing of telecommunications and affordable housing projects across Africa. We have benefited from its deep knowledge of Ghana’s energy sector and its expertise in port infrastructure developments, gained in other parts of Africa. Our project at Tema positions the energy sector in Ghana for both growth and environmental sustainability so that when the world recovers from Covid-19, Ghana will have the energy infrastructure needed to help it compete.
This project also positions Access LNG as a first mover in bringing right-sized LNG infrastructure solutions to sub-Saharan Africa, establishing a model for future developments across the region. With global LNG markets currently well supplied for the foreseeable future, there is a great opportunity for Access to support markets switching to natural gas as a clean, cheap transition fuel as we push developments to support a greener, more efficient energy economy, ” Ogbemi Ofuya, a Partner at Helios Investment Partners, said
“We are extremely proud of our involvement with Access LNG and to have earned the trust and support of EAIF for this ground-breaking project. As with all infrastructure developments, the new LNG terminal at Tema has required the concerted effort and alignment of multiple stakeholders to achieve, “Roland Fisher, a Director at Gasfin Development SA, enphasized.
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