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Two new committees to spearhead and monitor reform and efforts to unify contracts reveal the president’s focus on achieving stable power supply.

Nigeria
Issue 401 - 11 October 2019

Zimbabwe: Power tariffs rise again

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The government has approved a domestic electricity price rise of more than 200% from 3 October, raising tariffs to about US$0.12/kWh from approximately US$0.02/kWh. Following the rise, the second since August, domestic users will pay Z$0.41 for the first 50kWh and Z$0.91 for 51-200kWh, a stepped tariff designed to encourage energy saving in view of the country’s critical power supply situation. Tariffs were also increased for institutions, and commercial and industrial users, which are now being charged for energy usage depending on whether they consume power during peak, standard or off-peak times.

Zimbabwe
Free

Climate change denier Donald Trump’s 8 November election victory stunned the COP22 meeting in Marrakech, before the other 196 governments responded with defiant statements supporting the Paris Agreement. Tackling climate change and energy poverty has been central to Barack Obama’s presidency; his championing of COP was underlined by secretary of state John Kerry’s robust appearance in Marrakech; the Power Africa initiative is supported by the Electrify Africa Act, which puts sub-Saharan economies’ lack of energy access onto the US statute book.

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US oil field services company Baker Hughes agreed a memorandum of understanding (MoU) on 13 November to collaborate on gas projects with Sudanese engineering and construction contractor Asawer Oil & Gas Company, a subsidiary of state-owned Sudan Petroleum (Sudapet), according to an Asawer statement. This followed a late-October MoU with Vancouver-based State Oil Company Canada to take on exploration acreage to boost production from several oil provinces.

Sudan
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A strongly worded resolution against attempts to illegally export oil from Libya passed by the United Nations Security Council on 19 March was a further major blow to the rebel federalist organisation led by former Petroleum Facilities Guard chief Ibrahim Al-Jathran. When the Morning Glory tanker set sail from As-Sidrah terminal on 12 March with 234,000 barrels of oil on board, Jathran appeared on course for an unlikely victory over a divided government in Tripoli. The subsequent General National Congress (GNC) vote to dismiss prime minister Ali Zeidan suggested that the federalist strategy of using a power vacuum in the capital to assert autonomy in the eastern province of Cyrenaica might be working.

Libya
Free

The audit, funded by the UK’s Department for International Development, was contracted following revelations of the so-called “cashgate” scandal that caused President Joyce Banda to sack her cabinet in October and led to the suspension of $150m of aid by major donors, including the UK and European Union. The first three of some 70 people who have been charged appeared in court in late January. The scandal has dealt a substantial blow to Banda, who had sought to depict herself as a “new broom” sweeping out the corruption and poor governance of her predecessor Bingu wa Mutharika.

Malawi
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International donors are increasingly frustrated with the Ethiopian government’s approach to private power development as projects slow and development banks are shown the cold shoulder. Ethiopia remains a high priority for most donors, with the United States in particular strongly committed, but access to projects is limited and risks are increasing.

Ethiopia
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In a promising move for peace in the Niger Delta, rebel groups have reinstated a ceasefire signed in July to pursue further talks with the government. The key to ending the conflict and reaching a compromise is that the government addresses Niger Delta inhabitants’ most pressing grievance – a more proportionate distribution of oil and gas revenues from the region, which account for approximately 80% of government revenue.

Nigeria
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Prime Minister Ahmed Ouyahia confirmed that “it is time” for Algeria to revise its hydrocarbons law to attract investors and raise export revenues, speaking at the launch of two new gas carriers in Arzew on 1 October. While he gave no details about how the law would change, the official Algérie Presse Service (APS) reported energy minister Mustapha Guitouni as saying the reforms would hinge on improving fiscal terms, which were poorly adapted to the current low oil price environment.

Algeria
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Investor interest in Madagascar picked up when companies were attracted by the island state’s potential for power sector developments, as former president Hery Rajaonarimampianina hosted an influential donor and investor conference in 2016.The going has since proven tough for many investors, as early movers have run into payment issues with malfunctioning state utility Jiro sy Rany Malagasy (Jirama) and the administration has proved unpredictable in renegotiating power purchase agreements (PPAs).

Madagascar
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Spain’s Abengoa on 14 May announced the signing of a €32m ($41m) engineering, procurement and construction contract with the Kenya Electricity Transmission Company (Ketraco) to build a 132km transmission line and extend the Lessos substation in Kenya. The contract is being financed by the African Development Bank and is part of a project to interconnect the grids of the Nile Equatorial Lakes (NEL) countries that will involve the construction of 769km of transmission line in Burundi, the Democratic Republic of Congo, Kenya, Rwanda and Uganda. Abengoa will connect Lessos to the Tororo substation in Uganda. Commissioning is expected in 18 months with handover to Ketraco in November 2014.

Kenya
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The warlord Khalifa Haftar’s comprehensive blockade of oil export terminals in eastern and western Libya is an attempt to force his drawn-out siege of Tripoli into an endgame. His price for lifting the blockade is the replacement of both National Oil Corporation (NOC) chairman Mustafa Sanalla and Central Bank of Libya (CBL) governor Sadiq Al-Kabir. He also wants a greater share of oil revenues. Acceding to these demands would hand Haftar control of the two institutions that control the country’s resources and its money.

Libya
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US President Donald Trump signed into law the African Growth and Opportunity (Agoa) Act and Millennium Challenge Act (MCA) Modernisation Act on 23 April. In so doing he approved legislation aiming to promote foreign trade, support lower tariffs, and extend the domain of US development aid, showing the less-publicised, softer side of his approach to foreign policy. The signing was followed at the end of April by a visit to Washington by Nigerian President Muhammadu Buhari, the first African head of state to visit Trump in the White House.

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In the absence of President Muhammadu Buhari – who was in London until 10 March on extended medical leave, the energetic acting president, Oluyemi Oluleke Osinbajo, has been leading efforts to reduce tensions and offer the prospect of economic inclusion in the Niger Delta. Osinbajo on 2 March called on minister of state for petroleum Ibe Kachikwu to begin engaging with international oil companies (IOCs) to move their Nigerian head offices to the troubled region.

Nigeria
Free

Some African governments specialise in grandiose statements about mega-projects that will drive the continent’s electrification or achieve some other transformational goal. In many cases little happens, but the mega-project provides a useful symbol of rapprochement between two states. The Trans-Saharan Gas Pipeline (TSGP) planned by former Nigerian president Olusegun Obasanjo and Algeria’s Abdelaziz Bouteflika is one example still prominent on the Programme for Infrastructure Development in Africa project list.