Building Capacity to Manage Ghana's Oil - World Bank Assists with US$38 Million

December 20, 2010

WASHINGTON, December 20, 2010 - The World Bank Board today approved a credit of US$38 million to the Government of Ghana for implementation of an Oil and Gas Capacity Building Project.

The Project, which has become necessary following Ghana’s discovery of oil and gas in commercial quantities has two main objectives: first, to help improve public management and regulatory capacity and enhance sector transparency by strengthening the institutions managing and monitoring the sector; and second, support the development of indigenous technical and professional skills needed by the petroleum sector through support to selected educational institutions.

Since the oil and gas discoveries of 2007, Ghana and its partners in the Jubilee field have worked hard to bring it into production in barely three years – a record time by industry standards – but institutional development for sector management by the state and education and skills development face significant challenges.  “The Oil and Gas Capacity Building Project has been prepared in response to these challenges and to support Government’s desire to rapidly fix them,” says Sunil Mathrani, World Bank Task Team Leader for the Project. “The Ministry of Energy, the Ghana National Petroleum Company and the Environmental Protection Agency are among the key state institutions targeted for support.”

Specifically the Project will provide institutional support to the Ministry of Energy and the soon-to-be-established petroleum regulatory body to enable them play their oversight, coordination, policy planning and implementation as well as monitoring and evaluation roles effectively. Other specific functions to be enhanced include upgrading the Ghana National Petroleum Corporation’s petroleum data repository; and support to the Environmental Protection Agency  to enhance its ability to manage and monitor environmental issues in the oil and gas sector.  Other beneficiaries are the Ministry of Finance and Economic Planning, particularly its agencies such as the Ghana Revenue Authority and the Extractive Industries Transparency Initiative Secretariat; the Attorney General’s Department and the Economic & Organized Crime Office.

Another component of the Project targeting human capital development will provide support to the Kwame Nkrumah University of Science & Technology to improve petroleum engineering and petrochemical engineering teaching and research capabilities.  Additionally it will provide support to vocational training institutions for development of programs focused on technical skills development for the oil and gas industry via support to the Takoradi Technical Institute, Kikam Technical Institute and the Regional Maritime University.

Given the strategic role civil society is expected to play in promoting accountability and community participation, an additional grant of US$2 million is being provided under the Bank’s Governance Partnership Facility (GPF) to support a wide range of activities to be championed and implemented by civil society and community based organizations. “This Project seeks to support the determination of the people of Ghana to make oil a blessing and not a curse. We hope that the support to educational institutions will contribute to Ghana’s intention to develop local content and employment in the sector as quickly as possible,” said World Bank Country Director, Ishac Diwan. “We see a big role for CSOs,” he added, “and it is part of the plan to support capacity building at that level, to enable them play their part actively as agents of social accountability. We have been assisting the CSO platform on Oil and Gas, and we are happy they are already serving as great partners to Government.”

Hon Joe Oteng-Adjei, Minister of Energy on his part notes “this Project could not have come at a better time.  Building capacity in the oil & gas sector is paramount, and we are going to ensure a swift implementation in order to achieve good results for the people of Ghana.” 

The US$38 million World Bank support – a concessional loan with a repayment period of 35 years including a 10 year grace period – constitutes two-thirds of the total Project cost.  Other co-financiers are the Governments of Ghana and Norway.  The Project is planned to take off in 2011 and end in 2015.

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