Business News of 2014-02-07

Atuabo free port to begin second quarter

The Atuabo Free Port project, aimed at providing support services to offshore oil and gas activities both in Ghana and in the wider West African sub-region, is set to begin in the second quarter of the year as parliament is expected to soon ratify the deal.

Cabinet has already approved the US$650m project, which is expected to create some 1,500 jobs in its logistics supply bases, warehouses and fabrication yards, among other activities.

The project is being wholly funded by Lonrho, a UK logistics company, but has 45% Ghanaian interest. The government is said to have negotiated for Ghanaian institutions like the Volta River Authority and SSNIT to participate in the project.

The chairperson of the port will be nominated by the government of Ghana. As an equity shareholder in the project, the government is also expected to earn dividend and royalty payments.

A memorandum of understanding was signed between Lonrho and the government of Ghana in August 2011 under the late President Atta Mills for the project.

Lonrho has since spent some US$15m on feasibility and preparing the ground for take-off.

In an interview with the B&FT, CEO of Lonrho Geoffrey White said financing for the project has already been secured; indeed, he said debt equity financing for the project was “oversubscribed” due to investor confidence in Ghana.

No funding, guarantees or subsidies are required from the government of Ghana for the project, he said.

The project offers Ghana a strategic opportunity to become a regional hub for support services in the West Africa sub-region, which is becoming increasingly important for oil and gas production, he added.

La Cote d’Ivoire, Liberia and Sierra Leone have all seen increased exploratory activity in recent times.

The Atuabo Free Port will include Logistics supply bases including warehouses, storage facilities and offices.

It also includes a fabrication yard for sub-sea fabrication companies to build various components for the oil and gas field infrastructure, as well as rig and vessel repair facilities.

According to Lonrho, “The new facility is uniquely located to capitalise on the growth in deepwater exploration in West Africa, with an expected increase of 300 offshore supply vessels in the region over the next five years”.

The company adds that: “Atuabo Free Port provides an attractive location for Ghanaian companies to become involved in the wider West African oil and gas industry and not just the Ghanaian market.”

Phase one development of the project, Lonrho said, calls for an investment of approximately US$600m to construct and equip the free port, which will include local content spending in excess of US$150m.

“The project will stimulate training for Ghanaians to offer the necessary skills for the companies operating at the port,” the company said.

Source: B&FT
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