AFRICAN ENERGY CbI www.africa-energy.com Issue 287 • 23 October 2014 Financial close of Ghana’s Cenpower scheme boosts West Africa gas prospects Prospects for harnessing West African gas to meet the region’s growing power demand have received a significant boost with financial close for Ghana’s $900m Cenpower scheme, writes Thalia Griffiths enpower Generation Company Limited announced the Ghana’s government has its own payments problems, notably in financial close of $900m of project finance for the Kpone the heavily subsidised fuel sector, where severe supply shortages Cindependent power plant (IPP) at Tema on 3 October. earlier this year highlighted the level of government debt to bulk The 350MW combined cycle gas turbine plant is due on stream distribution companies ( AE 281/18 ). in 2017 and will be energy-hungry Ghana’s largest private power Hamilton said it had been challenging to persuade financiers to scheme, accounting for some 10% of total installed capacity and accept that additional element of risk, but payments from offtaker 20% of available thermal generation capacity. Dutch development Electricity Company of Ghana (ECG) are guaranteed by the agency FMO contributed $200m, the rest was private equity and government, and there is also a letter of credit (l/c) providing an debt, including $425m of commercial debt raised by Rand additional level of comfort. This covers about a month’s worth Merchant Bank with South African export credit agency backing. of payments with the plant running on gas, slightly less on oil, EleQtra partner Ebbe Hamilton told African Energy that many and, in essence, gives an additional layer of liquidity in case of West African power projects were tolling schemes, where the cash constraints at ECG. It also provides a level of structure and government provides the fuel, but Cenpower is a “full service” discipline to the payment process that should result in timely payments. scheme that sources its own fuel as well as converting it to power. Of the $900m project cost, $200m is for working capital Hamilton stressed that Cenpower was “a very African project”, and logistics for the fuel element, which would otherwise have with more than 80% of the debt and more than two-thirds of had to be funded by the government. Continued on page 3 Koeberg blues Turkana tussles Onhym plays down Genel well result The dispute that broke out Tullow Oil’s operations in Morocco’s Office National des UK, and other locations abroad, between Westinghouse and Kenya’s Turkana County are Hydrocarbures et des Mines but the biggest challenge will be (Onhym) is playing down reports Eskom following the award to facing new protests, this time the conversion from Onhym’s of an offshore discovery by Genel carried interest in exploration to Areva of a R4.2bn ($383m) over contractor employment contract to replace six steam Energy with the Sidi Moussa 1 the 25% participation in practices on Block 10BB., generators at the Koeberg well. Partner San Leon Energy on development written into nuclear power plant has led to Turkana governor Josephat 20 October said the well had Morocco’s standard contracts. “To Nanok said the dispute was reached a total depth of 2,825 participate, we will need to raise tough statements from US metres and encountered oil caused when oil services funds, but this should not prove a officials. US ambassador to during drilling operations. major challenge,” Benkhadra said. South Africa Patrick Gaspard provider Ardan laid off Onhym head Amina Benkhadra said the US was concerned workers, but talks between told African Energy oil traces had “We do not, as yet, have the with a number of legislative Tullow, Ardan and local been found in secondary layers, number of technically qualified and policy developments, political leaders had resolved but more work was needed to staff, but that is coming through citing recent changes to the issue. Ardan has just been confirm a significant find. training. But it is the financial various legislation inclusing bought by AIM-listed Africa She said Onhym was putting in aspect that will be most important the Mineral and Petroleum for us, as each venture is set up as Oilfield Logistics, which has place plans to partner international Regulatory Amendment Bill oil companies if one of the many an established company and we and the termination of bilateral dropped Philippe Edmonds as companies exploring in Morocco raise funds for that. Fortunately, in investment treaties. non-executive chairman. made a discovery. Technical staff Morocco we have a lot of very are being trained in Cambridge, well qualified bankers.” —S EE PAGE 4 —S EE PAGE 12 ISSN 1463-1849 Cross-border Information Contents FOCUS GHANA: Financial close for Cenpower scheme 1 AFRICA N MOROCCO: Onhym plays down Genel well result 1 POWER ENERGY SOUTH AFRICA: US intervenes in Koeberg dispute 4 SOUTH AFRICA: Nuclear agreement with France 4 Issue 287 • 23 October 2014 SOUTH AFRICA: First turbines synchronised at Sere 5 Incisive analysis since 1998 NORTH AFRICA: Desertec disappears into the sand 5 KENYA: ACEF grant for geothermal project 6 Editor BURUNDI: Gigawatt Global plans solar PV scheme 6 Thalia Griffiths [email protected] NAMIBIA/ZIMBABWE: New 80MW PPA signed 6 Editorial Director BOTSWANA: Problems continue at Morupule 7 Jon Marks BOTSWANA: FQM to take majority stake in Sese 7 [email protected] POINTERS: Egypt 7 Cartographer David Burles UPSTREAM OIL AND GAS Contributing Editors KENYA: Tullow faces more protests 9 Eleanor Gillespie, John Hamilton, William Macpherson, Dan Marks, TANZANIA: Seventh Block 2 discovery for Statoil 10 David Slater, Leonard Lawal (Lagos), François Misser (Brussels) TANZANIA: Aminex sells down Kiliwani North share 10 KENYA: Tullow hopeful after Kerio Basin well 10 Sales and Service KENYA: Wells planned for onshore blocks 2B, 12B 11 Direct: +44 (0) 1424 721 667 MOZAMBIQUE: Eni signs Kogas deal 11 Fax: +44 (0) 1424 721 721 Email: [email protected] SENEGAL:Cairn discovery 11 Director SENEGAL/GUINEA BISSAU: Oryx takes AGC Central 11 Nick Car NIGERIA: Ophir founders join Sirius Petroleum 11 [email protected] GABON: Ruche development plan approved 12 Manager Tara Mulvey POINTERS: Gabon 12 [email protected] CAMEROON: Woodside farms into Tilapia block 12 Single subscriptions of African Energy are available in Internet format EQUATORIAL GUINEA: Ophir buoyed by Fortuna DST 13 – including online and emailed content. Multi-user and academic NAMIBIA: Chariot drops 1811A&B 13 rates are available. www.africa-energy.com UPSTREAM UPDATE: COTE D’IVOIRE OVERVIEW: Launch of deep-water blocks 14 TABLE: Onshore and offshore E&P 14 MAP: Côte d’Ivoire E&P 15 FINANCE AND POLICY REGIONAL: IEA urges greater energy investment 16 NIGERIA: IFC buys $50m of Seven Energy bonds 16 2014 Cross-border Information. All rights reserved. GOVERNANCE AND COMPLIANCE Data and information published in African Energy is provided to Cross- border Information (CbI) by its staff and network of correspondents CORPORATE: Afren sacks senior team 17 through extensive surveys of sources and published with the intention of CHAD: EITI compliant 17 being accurate. CbI cannot insure against or be held responsible for inaccuracies and assumes no liability for any loss whatsoever arising from use of such data. DIARY No portion of this publication may be photocopied, reproduced, EVENTS: What’s on around the region 19 retransmitted, put into a computer system or otherwise redistributed without prior authorisation from Cross-border Information. AFRICAN ENERGY VIEW Registered office: 4 Bank Buildings, Station Road, REGION: Heavyweights get behind infrastructure 20 Hastings, East Sussex TN34 1NG, United Kingdom. Directors: JJ Marks, JM Ford, JD Hamilton, NJ Carn, E Gillespie 2 AFRICAN ENERGY • ISSUE 287 • 23 OCTOBER 2014 Focus Ghana Cenpower scheme “Their FDP allows them to export and they’ll probably get a better price in Ghana than Nigeria,” Hamilton said. EleQtra Continued from page 1 operated as captive developer for InfraCo until May 2013, but the equity coming from African sources. The equity raising will the exclusive arrangement was ended by InfraCo for bring three investment groups into the consortium, while procurement reasons. InfraCo is now also developing projects InfraCo, one of the initial development partners, will pull out. with Aldwych International, while eleQtra is free to look at The new investors are Japan’s Sumitomo Corporation, African other partners and other ways of doing business, though it still Infrastructure Investment Fund II, via an investment vehicle has ten projects in development for InfraCo. With plenty of called Mercury Power, and FMO. capital seeking bankable projects, specific development expertise Post-financial close, the equity holders in Cenpower are the like eleQtra’s is in demand. Lagos-based Africa Finance Corporation (AFC), with 31.85%, Its 25.5MW Cabeolica wind farm in Cape Verde is fully Ghanaian investment consortium Cenpower Holdings Limited (21%), Sumitomo Corporation (28%), Mercury Power (15%) operational, and eleQtra is running the Kalangala Infrastructure and FMO (4.15%). Services scheme managing power, water, ferry services and a road upgrade on an island in Lake Victoria. For multi-government funded InfraCo, the project has proved a good investment, with a $900m project resulting from a Transmission grid plans development spend of just over $10m. InfraCo is a facility of the Private Infrastructure Development Group, a coalition of At the same time that new generation projects are lining up in donors seeking to mobilise private sector investment into Ghana, Côte d’Ivoire and elsewhere, the West African Power infrastructure in less developed countries. “With demand in Pool (Wapp) is redoubling efforts to build new interconnections Ghana growing by 150MW/yr, they need a project like this and boost existing transmission capacity. The rationale for the every two years, plus another couple to catch up,” Hamilton power pool is that electricity can be more cheaply bought from said.