Ghana has begun the construction of a 300,000bpd oil refinery, as it looks to become a major petroleum producer in West Africa.

The project will be developed in three phases, with the first phase set to cost $12bn.

It is being funded by a consortium of construction and venture capital organisations: that include Touchstone Capital Group Holdings, UIC Energy Ghana, China Wuhan Engineering Co., and China Construction Third Engineering Bureau Co.

Ghana’s president Nana Akufo-Addo said the project “promises to be a cornerstone of our nation’s development”, speaking at the project site in the southwestern city of Jomoro on 19 August.

The West African currently nation imports 90% of the 800,000bpd that it consumes, according to the African Refiners and Distributors Association.

Ghana hopes the petroleum hub will produce enough refined products to supply the whole of West Africa and move the region away from imports completely by 2036. The nation currently produces 132,000bpd of crude oil, having achieved first production in 2010.

The viability of the plans, however, has been brought into question.

Speaking to Reuters, Bright Simons, vice president at the Accra-based think tank IMANI Africa, said the consortium behind the project “is not primed for investment (and) the project has no bankable business plan”.

He added: “Our position is that this is a speculative attempt to grab a landbank for cheap.”

According to the local news source Graphic Online, the government has offered $12.86m in land compensation to communities affected by the imminent construction of the refinery.

Nevertheless, Oliver Barker-Vormawor, a lawyer representing farming cooperatives, said his clients will not back down in the face of the government.

“The abrasive manner that the government is proceeding discounts valid concerns around the social and environmental impact of the project,” he told a US media outlet.