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Since the summer of 2013, Herbert Smith Freehills has advised Vitol, a leading energy and commodities company with a turnover of US$168 billion, on its US$7 billion oil and gas project in Ghana with Eni. Herbert Smith Freehills has advised on the commercial contracts, including a US$500 million International Development Association (IDA) supported letter of credit structure to support timely gas payments under the offtake arrangements (the largest ever IDA political risk guarantee), as well as the up to US$1.65 billion multi-sourced financing of Vitol's minority interest. 

The multi-sourced financing, which signed on 14 December 2016 and closed on 09 March 2017, is the first successful, largescale gas-to-power project financing in Africa. It includes facilities provided by the International Finance Corporation, United Kingdom Export Finance and a commercial bank group including HSBC, Société Générale, ING, Standard Chartered Bank, Bank of China, Natixis, Mizuho and Mitsubishi UFJ Financial Group.  The Multilateral Investment Guarantee Agency (MIGA) is providing some of the commercial lenders with political risk guarantee cover.

This is the first major development of gas in Ghana and will enable the transformation of the economy. The World Bank describes the development of the pure gas fields contained in the Project as a ‘top priority’ for Ghana, as it will underpin the growth of a domestic thermal power sector and accelerate Ghana’s industrial development. The Sankofa and Gye Nyame fields in the Project contain enough gas to continuously supply Ghana’s thermal power sector until at least 2036. In addition to the energy source, Ghana will benefit from enhanced oil production, Ghana National Petroleum Corporation’s (GNPC) participation in the Project, and royalties and taxes generated by the oil and gas production.

The Herbert Smith Freehills team is led by Finance partner Martin Kavanagh and corporate partner Steven Dalton, alongside senior associate Rowena van de Grampel.  

Key contacts

Martin Kavanagh photo

Martin Kavanagh

Partner, London

Martin Kavanagh
Steven Dalton photo

Steven Dalton

Partner, London

Steven Dalton
Rowena van de Grampel photo

Rowena van de Grampel

Of Counsel, London

Rowena van de Grampel

Media contact

For further information on this article please contact

Carl Philip Brandgard

Carl Philip Brandgard, Communications Manager

London