Page 10 - AfrElec Week 38

AfrElec EMISSOIN AfrElec
Russia has recently suffered a series of environ- mental disasters.
In summer 2019, Russia suffered from a series of wildfires and floods, prompting the gov- ernment to discuss seriously for the first time the economic and environmental dangers of rising temperatures.
ESG
And there is change at the corporate level – again not because of any road to Damascus moment, but because equity investors are starting to dump shares of companies that are not paying any attention to their environmental, social and governance (ESG) scores – a new standard of measuring not just the profitability of a com- pany but also the sustainability of its business. Given so many Russian companies are in the raw materials business and heavy polluters their ESG scores are low.
Climate change and the expanding global population are changing the way investors think about long-term returns. The prospect of an environmental disaster is changing public
perceptions too. The population is becoming more demanding, changing they way they shop and invest. That means Russian companies have started investing billions of dollars to literally clean up their acts.
The change is both a challenge and an oppor- tunity for a company like Sibur, Russia’s biggest petrochemical producer. Corporate governance has already been an issue for Russian companies since the idea was championed by the likes of oil company Yukos almost a decade ago, and the Soviet legacy of blurring the line between work and the private life means Russian companies are also sensitive to social issues. But concern for the environment is new and will take longer to work its way into the Russian corporate DNA. However, the leading companies have already started to invest into clean energy and reducing their emissions.
Whether they are doing enough fast enough remains to be seen, but with the Kremlin hav- ing negotiated such a low bar to clear to meet its Paris accord obligations they have time to make the changes.™
GAS-FIRED GENERATION
Nigeria LNG seeking $10bn in financing for Train 7 expansion scheme
NIGERIA
TONY Attah, the CEO of Nigeria LNG (NLNG), said last week that the consortium intended to finance a $10bn expansion project through a combination of debt and equity.
According to Attah, the group has already begun talks with commercial lenders in a bid to secure $2bn worth of loans, enough to cover 20% of projected costs. To this end, it is holding discussions with some of Nigeria’s 10 biggest banks, including Zenith Bank and Guaranty Trust Bank, he told Bloomberg in an interview.
With respect to the remaining $8bn, he said, NLNG will seek financing from foreign banks and from export credit agencies. “We have done the financial market pitch to know who has capacity,” he commented.
The consortium has appointed Guaranty Bank and Sumitomo Mitsui Banking of Japan to serve as its advisor for the fund-raising process, he added. NLNG is seeking financing to cover the $7bn cost of building Train 7, a new gas liquefaction unit that will boost its production capacity by 40%, and the $3bn cost of producing and transporting the gas that will serve as the
facility’s feedstock.
Attah went to say that the consortium still
expected to make a final investment decision (FID) on the Train 7 project by October 31. In the meantime, he said, NLNG is wrapping up a sales campaign for the fuel coming out of Trains 1, 2 and 3, and anticipates signing bilateral deals with current and new clients before the end of October. He also noted that the group had already signed sale and purchase agreements (SPAs) with a number of existing and new clients for future LNG production from Train 7. Bang- ladesh, Jamaica, Jordan and Pakistan are likely to be among the biggest buyers of LNG from the new production facility, he said.
Train 7 will be part of the Bonny Island gas liquefaction plant. The facility is currently capa- ble of turning out 22mn tonnes per year of LNG. Once Train 7 comes on stream, its production will rise by 8mn tpy to 30mn tpy.
Nigeria LNG has four shareholders: Nigeria National Petroleum Corp. (NNPC), with 49%; Royal Dutch Shell (UK-Netherlands, 25.6%), Total (France, 15%) and Eni (10.4%).™
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w w w . N E W S B A S E . c o m Week 38 25•September•2019