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Despite the turmoil in global capital markets, Tullow Oil seems to have had no trouble persuading banks to refinance its debt to fund major developments in Ghana and Uganda, writes Kevin Godier.

Rating agency Moody’s Investors Service lowered Eni’s long-term corporate credit rating to A3 (outlook negative) from A2 on 16 July. It also lowered the company’s short-term credit rating to P-2 from P-1.

Production cuts by a majority of Organisation of the Petroleum Exporting Countries (Opec) producers, working in coordination with non-Opec exporters led by Russia, have helped to raise oil prices from their 2014-16 lows; the strategy seems likely to maintain crude benchmarks at around $50 for some time. While second-guessing the oil price is a hazardous business, African Energy’s soundings of major international oil companies (IOCs) suggest this represents a ‘new normal’ for the industry, as factored into corporations’ base case scenario-planning.

The World Bank’s International Finance Corporation (IFC) has obtained approval from Zambia’s Securities and Exchange Commission to issue kwacha-denominated bonds of up to 2.5bn kwacha ($460m). The IFC can now issue local currency bonds supporting local capital markets and increasing access to local-currency finance for the private sector. 
The bonds will be issued under the IFC Pan-African Domestic Medium-Term Note Programme, launched in May 2012 to facilitate regular bond issuances by the IFC in the region.

Since early October, workers have been planting 5,000 to 10,000 trees a day of 35 different species including fast-growing ones such as acacia, eucalyptus and pine at Ibi, on a 4,500 hectare area in the Bateke highlands, some 150km from Kinshasa, between the Ufimi and Duale rivers.

Abu Dhabi National Energy Company (Taqa) said on 28 January it had signed final agreements marking the close of the $1.4bn project financing for the expansion of the Jorf Lasfar Electricity Company (JLEL) power plant (AE 234/8). JLEL is already the largest coal-fired power plant in the Middle East and North Africa and the first independent power producer in Morocco, supplying 40% of the kingdom’s electricity output.

Africa-focused renewable energy developer Joule Africa has signed a tripartite agreement with the Ministry of Water Resources and Energy and power utility Eneo for the 485MW Kpep hydropower project on the Katsina Ala River in north-western Cameroon. The letter of intent was signed in Yaoundé on 13 January.Joule Africa president Mark Green was quoted as saying at the signing ceremony that the project, which would take four years to build and create over 3,000 jobs, would ensure stable power supply for the north-western and western regions of the country.

The Libyan National Army (LNA) assault on Tripoli is developing into a protracted siege with casualties rising as air strikes and missile attacks become more common. According to the World Health Organisation, by 28 April 345 people had been killed and 1,652 wounded in this new phase of fighting. Other reports said about 30,000 people have been displaced since combat activities resumed. The conflict is still concentrated on the capital and oil production has not yet been affected, but threats to the sector are increasing all the time.

Qatar National Bank (QNB) has entered sub-Saharan Africa with the acquisition of a 23.5% stake in Togo-based Ecobank Transnational Incorporated. In early September, QNB bought a 12.5% stake in the bank on the Nigerian Stock Exchange for some $290m from Asset Management Corporation of Nigeria, which took over the asset following Ecobank’s disastrous merger with Lagos-based Oceanic Bank. QNB then bought another 11% for $283m ten days later.“Following the transaction Ecobank is discussing a strategic partnership with QNB which will enable the two banks to forge business relationships of mutual interest to their respective customers,” Ecobank said.

Edinburgh-based Bowleven has raised $113m through a placing of 22m new shares at £3.27/share to finance a stepped-up exploration programme in the Douala Basin

State utility company Office National de l’Electricité has lined up a E50m ($67.6m) buyer credit to support the construction of a 72MW power plant in the Agadir region to be built by Man Diesel & Turbo.

The board of the Extractive Industries Transparency Initiative (EITI) decided on 4 September to suspend Liberia for failing to publish its EITI report for the year to June 2016 by the 1 July 2018 deadline. The government had asked to extend the deadline, but the board declined, noting that the request had not been endorsed by Liberia’s multi-stakeholder group (MSG), as the group had not been reconstituted since the end of its term in October 2017.

The government is considering three tariff measures to reduce the impact of Covid-19 on the power sector. African Energy understands that the first is a reduction in the tariff for social customers, the lowest income segment of Electricidade de Moçambique’s (EdM) customer base. This is unlikely to have a significant impact on EdM as social customers only comprise a small proportion of revenues.

Gigawatt Global has secured grant funding from the US Trade and Development Agency (USTDA) for a feasibility study for a planned 7.5MW solar photovoltaic power plant at Mubuga in central Burundi. USTDA said on 30 March that the grant funds would cover a study of key technical and economic aspects, and environmental and social impact assessments, and provide the necessary analysis for the developers to secure financing. Gigawatt signed a memorandum of understanding with the government for the project in July 2014.

The African Development Bank (AfDB) has launched its second Uganda shilling-denominated bond on the domestic capital market. The 12.5bn shilling bond, which closed for subscription on 27 May, is the latest issuance under a 125bn medium-term note (MTN) programme established in mid-2012. The MTN approach was adopted to allow the Bank to regularly tap into the Ugandan capital market, issuing various tranches rather than standalone transactions thereby minimising costs for its clients and reducing the lead time necessary to access the market. The AfDB said its return to the Uganda market reflected local demand for additional debt instruments and the need for local currency financing to push infrastructure and other development projects. 
The AfDB plans to launch new MTN local currency programmes in Nigeria and Zambia in the coming months.