Page 8 - AfrElec Week 49

AfrElec
NEWS IN BRIEF
AfrElec
INVESTMENT
Energy Chamber: Ghana and Nigeria top list of markets to watch for key project developments
In its African Energy Outlook 2020 report launched last month, the African Energy Chamber highlighted the importance of increased infrastructure capacity in Africa’s long-term industrial development.
Spotlighting the $12bn Dangote Refinery in Nigeria and Ghana’s Tema LNG Terminal, the chamber noted essential role such projects play in revamping the sector and creating opportunities for private sector investors.
“At a time when the low oil price is gripping treasury revenues, private capital
is developing key oil and gas infrastructure projects which could have a significant impact on the African energy and power landscape over the next decade,” the report said.
On the Dangote Refinery, the chamber called attention to the current state of Nigeria’s infrastructure and the contribution the project would have specifically as the country works towards tripling its refining capacity to 1.5mn bpd by 2025 as a means to reduce its reliance on fuel imports. It said: “[The] refinery’s tank farms are set out for completion in Q4-19
and they may be used as a depot before the refinery’s production starts. This would provide an immediate increase to fuel storage capacity.”
Ghana’s determination to become sub- Saharan Africa’s first LNG importer in 2020 is set to become a reality as the Tema LNG terminal project nears completion. The project will be able to cover 25% of Ghana’s total electricity generation capacity, with gas providing a cheaper alternative to oil.
“The deal with Rosneft enables Ghana
to diversify gas imports away from Nigeria, which has consistently failed to provide the agreed level of supply since the West African Gas Pipeline started operating (back in November 2011),” the Chamber explained. Adding that the emergence of offshore storage and regasification technology is enabling smaller, lower-risk, rapid LNG solutions that could be replicated elsewhere in the region in countries with substantial gas reserves.
FINANCING
Green Climate Fund, AfDB
to provide $154mn of green
financing in Zambia
The Green Climate Fund (GCF) and the African Development Fund (AfDB) have joined hands to support a $154mn renewable financing framework in the southern African nation of Zambia.
Historically, Zambia has been reliant on hydropower for 90% of its energy needs. But the country is now facing severe challenges in keeping up with the ever-rising energy
demands of the country. The situation has become worse as the country has been hit by droughts which limit hydroelectric power generation.
To address these issues, the framework
will deploy alternative energy sources by financing 100MW of renewable energy projects, which would primarily be small solar projects. The framework will also provide the required technical help for the development of sustainable electrification policies and help domestic financial institutions to finance such projects.
The total financial requirement of the framework is nearly $154mn, out of which GCF will provide $50mn in debt financing and $2.5mn as a grant to support the technical aspect of the project. The framework will also be co-financed by AfDB, which will provide $51.5mn and the remaining $50mn will come from banks and private sector investors.
Recently, Univergy Solar, a renewable energy company based in Japan, announced that it will invest more than $200mn in two solar projects in Zambia. These new projects are expected to add nearly 200MW capacity to the country’s national grid by the next year. The country’s severe drought has led to an energy deficit of 750MW.
Earlier this year, the Global Energy Transfer Feed-in tariffs (GET FiT) had awarded 120MW of solar PV projects under round one of GET FiT Zambia solar tender. Six projects of 20MW were awarded, totalling 120MW. The GET FiT tender had an initial plan to award 100MW, but due to favourable results, the country decided to allocate an additional 20MW.
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Week 49 12•December•2019