Project Description
This summary covers a loan by Citibank, NA (Citibank) of the United States to Kosmos Energy Finance International. Citibank has applied for a MIGA guarantee of $100 million for a period of up to seven years against the risks of expropriation, breach of contract, war and civil disturbance.
MIGA’s coverage is sought to guarantee part of a loan facility issued by a consortium of banks to Kosmos that will be used to refinance the company’s existing debt and for additional funding for its upstream development in Ghana. MIGA’s proposed coverage would be for Citibank’s participation in the total loan facility ($2 billion). Kosmos’ primary producing field is the Jubilee Field offshore Ghana. The Jubilee Field’s phase one development achieved first production in November 2010 and is now producing around 65,000 barrels of oil per day (bopd) with output ramping up toward the 2011 plateau target of 120,000 bopd.
Environmental Categorization
The project is a category A under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary prepared by the International Finance Corporation for their investment in Kosmos Energy Finance International. While Kosmos’s investment is covering capital expenditure for new development in Ghana, Cameroon, and Morocco, the scope of MIGA’s guarantee coverage is limited to political events in Ghana only. MIGA intends to present the project to the Board concurrently with the IFC on December 15, 2011.
Development Impact
Overall, the Jubilee Field’s continued expansion of operations is expected to help to secure the significant economic and developmental benefits to Ghana. These benefits come primarily in the form of government revenues from the Jubilee Field oil sale proceeds, support to local employment, and training of Ghanaian nationals. In addition, the development of the Jubilee Field also facilitates the creation of opportunities across the energy value chain, such as construction of onshore gas-processing, development of gas distribution infrastructure, and gas-to-power projects at Takoradi and Tema.
The project also supports MIGA’s strategy of promoting investment in complex projects and in countries eligible for assistance from the International Development Association.
