Petroleum Hub: Govt Heads 10% of US$50Billion, 90% Private Sector

The Minister for Energy, Mr Boakye Agyarko has said over $50billion of investments will be required from public and private investments to build the relevant infrastructure for Ghana’s petroleum hub.

He indicated that government is required to raise 10% of this investment to provide basic public infrastructure like road network, electricity, water, etc. needed at the hub.

Mr Agyarko noted that his outfit has up to 10years to realise government’s vision of making Ghana the sub-regional petroleum hub.

The sector minister said this at the 2nd Edition of the Ghana International Petroleum Conference (GhipCon2018) in Accra under the theme, “Realising the Vision of a Petroleum Hub” at Kempinski Hotel.

He noted that considering that over $50billion of investment funds will be required to make this vision a reality, government will carefully consider the strategies and the enabling environment needed to attract such investments for the project.

According to him, there are various options under consideration including public-private partnerships for the provision of the needed basic infrastructure at the hub.

“Obviously, the bulk of the investment required is going to be Foreign Direct Investment (FDI) but we will need to strike a fine balance between FDIs and local participation to ensure that there is significant value retention in the country. To this end we expect our Petroleum Service Providers (PSPs) to upgrade their skills and businesses to play a part in this venture,” he stated.

Mr. Agyarko added that financing for new refineries has become difficult to obtain especially as some existing refineries across the world are being shut down due to low margins.

“But I believe that with the right strategy and value proposition coupled with the right environment, investors will choose Ghana and partner with us to develop infrastructure such as refineries, tank farms, pipelines, marine facilities for expanding our export capability and other allied facilities required to make our hub vision a reality,” he intimated.

The sector minister posited that government will play its role effectively to make this vision a reality. We know that Investors are mainly attracted by strong economic fundamentals in the host country and look out for indicators such as political and macroeconomic stability, level of skills, and availability of basic infrastructure and trade policies.

He added that government will provide different forms of incentives including fiscal measures to attract the needed investments. With these incentives and the strategic location of our country especially in the sub-region, we are optimistic that our hub will compete favourably with other trading centres across the world.

In August 2017, Mr. Boakye Agyarko indicated that the Ministry inaugurated a Task Force to develop an Infrastructural Master Plan and Roadmap for the realization of this vision.

He noted that the Task Force, after visiting some countries with similar hub infrastructure to learn from their experiences, engage stakeholders and prospective investors, became convinced that the proposal for a petroleum hub in Ghana was feasible.

Source: CBOD News