Ghana
Quantum Terminals II
Guaranteeing Ghana’s future energy security. Support from GuarantCo enables Quantum Terminals to issue the first local Non-FI Corporate bond over a 10-year tenor.
$10.8m
Total investment
$5.4m
Value of PIDG investment
2m
Number of people benefitting
Background
Ghana’s economic development continues to be hampered by infrastructure deficits, particularly in its energy and transport sectors. Domestic production of Liquid Petroleum Gas (LPG) began in 2014, however a lack of associated infrastructure has constrained access to the fuel and large areas of the country remain reliant on charcoal and wood gathered from largely non-renewable sources. Having identified LPG as a cleaner, cheaper alternative to domestic fuelwood and imported oil and coal, the Government of Ghana is committed to increasing its penetration in Ghana’s energy sector.
Project
The project is based in Atuabo near the country’s Jubilee Oil Fields. Quantum Group, part of a Ghanaian oil and gas trading group, required finance to construct three 500m³ LPG storage tanks, three loading gantries and associated infrastructure to increase the availability of LPG in Ghana. The company encountered difficulties in securing the appropriate mix of hard and local currency finance. GuarantCo’s Ghanaian Cedi 12m (US$5.4m) guarantee enabled the company’s main banker, Standard Chartered Bank Ghana, to overcome barriers to investment to provide the local currency component of the finance alongside the hard currency required to deliver the project.
The original QTL project involved the construction of a Liquefied Petroleum Gas (LPG) loading and storage facility in Atuabo, Ghana, which was supported by Standard Chartered Bank and GuarantCo. Following completion of the project, Quantum wished to refinance the facility with a local currency bond. Quantum approached GuarantCo for a guarantee to support the transaction, which will be the first local non-financial institution corporate bond issued in the market.
Impact
The Atuabo facility is the first storage terminal dedicated to servicing domestically produced LPG from the Jubilee Oil Fields and Quantum Terminals is key to the government’s plans for long-term fuel security. The project will deliver improved access to affordable LPG for an expected 2 million people, reducing Ghana’s reliance on gathered wood, enabling greater engagement in economic activity and slowing dangerous rates of deforestation. LPG has substantially lower CO² emissions per kilowatt hour than oil, coal and biomass. Supporting the construction of vital storage and distribution infrastructure will reduce CO² emissions, contribute to Ghana’s fuel security and promote future economic development. Support from GuarantCo is enabling Quantum Terminals to issue the first local Non-FI Corporate bond over a 10-year tenor. This landmark deal will set the precedent for other companies in Ghana wishing to gain access to the local capital markets.
This landmark deal will set the precedent for other companies in Ghana wishing to gain access to the local capital markets.
