Ongoing projects in Africa.

Position:Energy
 
FREE EXCERPT

As might be expected, most of the big energy projects currently uncle] development concern oil and coal. About 885,000 b/d of new oil production is being brought on stream in Nigeria over the next three years, mostly in deepwater areas that are largely protected from the insecurity that plagues the onshore and shallow water fields of the Niger Delta. The schemes, which are all being developed by the oil majors, should boost the country's production capacity above 3m b/d.

Even with such massive offshore investment, any deterioration in the security situation in the Niger Delta could see Angola overtake Nigeria as the continent's biggest oil producer. It briefly held this title for a few months three years ago and a massive 1,025m b/d of new production capacity is scheduled to come on stream by the end of 2016. Angola too has the potential to produce 3m b/d.

Ghana, Uganda, Congo-Brazzaville and Tanzania will all benefit from upstream investment over the next few years but the only country to match the tens of billions of dollars being pumped into Nigeria and Angola is Mozambique. Vale and Rio Tinto are both developing coal projects with production capacity in excess of mm tonnes a year and Tete Province should yield 50-loom tonnes a year within a decade if sufficient transport capacity is put in place.

Similarly, US firm Anadarko and Eni of Italy are leading consortia that are jointly developing a liquefied natural gas hub in the far north of the country. Each consortium will supply gas from their respective fields in the Rovuma Basin to the plant. Four liquefaction trains--or production lines--are planned in the first instance, with total production capacity of 20M tonnes a year and required investment estimated at $20bn. However, eventual expansion to 50m tonnes a year has been mooted.

Securing the finance from international banks for such schemes should be straightforward, given that the LNG will be marketed to Asian buyers under long-term contacts, probably of about 20 years.

The water tower of Africa

Ethiopia is currently in the middle of the biggest hydro construction programme ever seen in Africa. National generating capacity has already jumped from 745 MW in 2009 to 1,886 MW thanks to the completion of the Gilgel Gibe II and Tana Beles schemes. This will be doubled by the $1.8bn Gilgel Gibe III scheme in the Omo-Gibe Basin, which is nearing completion.

Most funding for Gilgel Gibe III has been provided by the Industrial and Commercial Bank of China, the African Development Bank (AfDB) and the government of Italy. One innovation in project finance on the scheme is that contractors are to be paid in a mixture of Euro and Birr in order to support the local currency. Construction costs are put at [euro]1,47om, of which [euro]448m will be paid in birr and [euro]1,022M in euro.

Other similarly ambitious projects have already been planned but all are dwarfed by the 5,250 MW Renaissance Millennium Darn Project, which is being built on the Blue Nile, 73.0km kilometres west of Addis Ababa. Much of the power produced will be exported and an agreement has already been signed with Kenya's KenGen. The most unusual element in the venture is how it is being funded. Although total construction costs are put at $4.i.bn and the government does not appear to have raised anything like this sum, international construction and engineering companies have already begun work.

In April 2011, the government awarded a [euro]3.35bn engineering, procurement and construction contract on the project to Salini Costruttori, which is already...

To continue reading

REQUEST YOUR TRIAL