Page 11 - AfrElec Week 04 2021

AfrElec NEWS IN BRIEF AfrElec

POLICY updated on developments over the coming For years, coal assets were seen as an easy
months.” way to generate cash and selling them was
New Age receives formal BOWLEVEN OIL & GAS always sensitive in South Africa where they
employ many people and provide for most of
approval to apply for COAL the country’s power needs.
But since the 2015 Paris climate accord,
new Etinde exploitation Anglo American hires banks pressure has steadily mounted on companies
to reduce exposure to the most polluting fossil
agreement in Cameroon fuel. Anglo has already sold a large portion of

Bowleven, the Africa-focused oil and gas to prepare SA coal spin-off its South African and Australian coal assets,
exploration group traded on AIM, has Anglo American has hired RMB, Morgan halving its production of thermal coal since
announced that New Age, Operator of the Stanley and Rothschild & Co to advise on the 2015. In 2019, its South African coal assets
Etinde licence, has received formal approval separation and listing of its South African made a $5mn loss and produced 27mn
to apply for a new Etinde Exploitation thermal coal assets, as it aims to cut exposure tonnes.
Agreement (EEA). This would replace the to the polluting fuel, two sources with direct Glencore’s GLEN.L outgoing CEO Ivan
existing EEA which came into force by knowledge said. Glasenberg has also kept the door open for a
Presidential decree in January 2015. Anglo, listed in London and Johannesburg, possible spinoff of its thermal coal assets.
The agreement was reached following is expecting to list its coal within two years, Coal can still be profitable, however,
discussions with the Government of one of the sources said, Reuters reported. complicating efforts to agree the price of any
Cameroon’s representative, Société Nationale “Anglo Coal right now is following what’s sale.
des Hydrocarbures (SNH), the national been announced in terms of the de-merger,
oil and gas company of the Republic of but it’s not like they’ve completely shut the
Cameroon. The authorisation is based on door to a sale. It would just need to be at a
the following general terms:The new EEA price that is compelling enough for them to RESULTS
would be for the production of hydrocarbons want to divert their attention,” the second
including the delivery of gas to thermal power source said. KenGen profit more than
plants or any other projects confirmed by the An outright sale of the assets would require
State. the kind of large buyer that is hard to find for doubles to Sh18bn
Commenting on the announcement, thermal coal, the sources said.
Eli Chahin, CEO of Bowleven, said: “We Anglo’s overall market capitalisation is Power producer Kenya Electricity Generating
are pleased to announce that following a around $47bn. The value of its coal assets is Company (KenGen) has posted a 133 per cent
constructive dialogue between the Etinde JV unclear, the sources said, as coal prices have jump in net profit to Sh18.38bn for the full
partners and SNH, authorisation to apply surged in recent months and the COVID-19 year ending June 2020 on the increased output
for a replacement EEA has been granted. pandemic has impacted previous estimates. of cheaper geothermal and tax savings.
This is very positive news for the Etinde The company declined to comment on its The company completed its Olkaria V
development, as it essentially eliminates the advisers. geothermal plant in the year under review,
possibility of the Government of Cameroon In an emailed statement it said it was which helped it cut reliance on thermal
removing the Etinde licence from the JV working on the process and would “provide generators saving on costs while boosting its
partners, following the end of the initial six a further update in due course when we have electricity sales by 11.3 per cent to Sh39.8bn.
year development implementation period in clarity on timing and the exit mechanism”. Costs from the use of the thermal plants,
January 2021. The diversified miner said in May it mainly fuel charges, declined 57.9 per cent
“The JV partners continue to make good preferred separating and listing its thermal from Sh10.1bn to Sh4.2bn.
progress towards achieving a Final Investment coal operations on the Johannesburg Stock “KenGen recorded a 13.4 per cent growth
Decision on the licence in 2021 and I look Exchange. Reuters reported the miner was still in electricity revenue mainly attributed to
forward to keeping all our stakeholders considering a sale. the full operationalisation of our 165MW

Week 04 29•January•2021 www. NEWSBASE .com P11