West African Gas Pipeline Company Ltd., Ghana
MIGA has issued a $75 million guarantee for equity investments in the West African Gas Pipeline Company Limited, a Bermuda-incorporated company, covering a portion of Ghana’s contractual obligations for the West African Gas Pipeline project. The coverage is for a period of up to 20 years against the risk of breach of contract.
This guarantee will support the West Africa Gas Pipeline Project, which aims to build a 678-km natural gas pipeline to supply natural gas from Nigeria to markets in Benin, Ghana, and Togo. The project is designed to substitute abundant and cheap natural gas from Nigeria for expensive alternate fuels used by the power, industrial, mining and commercial sectors of the three countries. The MIGA guarantee is accompanied by an IDA partial risk guarantee to the West African Gas Pipeline Company for $50 million in respect to Ghana’s obligation to make certain payments.
The project will supply cheaper, cleaner energy and improve the reliability of energy systems in Ghana, Benin, and Togo, thus lowering the cost of power and improving the competitiveness of goods and services. It will also contribute to reducing gas flaring in Nigeria, which is aiming to eliminate all gas flaring by 2008. This project supports ongoing efforts to increase economic integration in West Africa. It is the first in the region to develop regional exports of natural gas. By standardizing technical specifications and regulatory frameworks, it will also facilitate energy trade among the participating countries.