Power & Energy

May 31, 2022

The group records a steady top-line of LKR 4,393 Mn and Gross Margin of 62% in FY21/22

Colombo, Sri Lanka, 31st May 2022 – WindForce PLC is recognized as the largest Independent Power Producer (IPP) of renewable energy in Sri Lanka. Pioneering wind power generation locally, WindForce will hold over 245MW in their portfolio at the end of the current financial year, and was the first Sri Lankan company to set up solar power plants in Pakistan, Uganda, and Ukraine.

Renewable energy generation is known to be highly seasonal with Sri Lanka’s wind patterns varying throughout the course of the year. Therefore, as WindForce’s power generation is predominantly based on wind power, it is prudent to appraise the company’s financial performance in terms of gross profitability on an annual basis as opposed to a quarterly appraisal.

As the largest IPP, WindForce has shown tremendous resilience amidst turbulent times maintaining stability in both top-line and gross profitability over financial years 2021 & 2022. In FY21/22, the company recorded a group revenue of LKR 4,393Mn contributing to a 2% YoY growth despite significant economic headwinds, and a gross profitability of LKR 2,724Mn reflecting a gross profit margin of 62%.

The top-line achievement in FY21/22 was amidst several operational disruptions such as a breakdown at the CEB’s Norochcholai Wind Collector Substation which was subsequently rectified in September 2021, as well as decreased operational capacity in WindForce’s Joule and Beta power plants due to blade damages caused by lightning. With repairs being made to the damaged turbine blades, the company expects to run at full capacity in the current financial year.

Further, as with most companies, key policy changes implemented by authorities such as the sudden floatation of the Sri Lankan Rupee in early March following a hard peg throughout, led to the company absorbing a significant exchange loss of LKR 296Mn on foreign currency loans in a single quarter, i.e. Q4 of FY21/22. However, it is important to note that all overseas project revenue is entirely foreign currency denominated, and all foreign currency debt is backed by foreign currency assets. In dollar terms, total FC assets stood at twice the total FC debt as of 31^st March 2022, where FC assets are held at cost, and loans revalued quarterly.

It is noteworthy that WindForce has continued in its efforts to successfully venture into new projects in FY22/23 to support the company’s medium-long term growth. At the end of 2022, WindForce is expected to add 25MW of solar and wind power to the local grid, where operational earnings are expected to flow from the second quarter of FY 22/23 onwards.

On the international front, WindForce is looking to expand the Tororo solar plant in Uganda by 30MW and are awaiting the generation license approval from the Regulator in Uganda. Discussions are also currently underway with the utility in Senegal regarding the 30MW solar + 7.5MW battery energy storage system, to set a beneficial tariff rate.

Locally, the sector’s economic contribution is demanding change in overall industry dynamics, with a greater emphasis on the shift to renewable energy, and upward revisions in CEB tariff rates. As an IPP with a strong local presence and a foreign footprint, WindForce is well-positioned to capitalize on opportunities both locally and globally.

May 31, 2022

The energy knowledge provider and Africa’s leading energy investment platform have renewed their strategic partnership agreement, paving the way for improved information dissemination regarding African energy

CAPE TOWN, South Africa, May 30, 2022/APO Group/ –Energy Capital & Power (ECP) (www.EnergyCapitalPower.com) is proud to announce that it has renewed its strategic partnership agreement with energy knowledge provider, Rystad Energy (www.RystadEnergy.com). Following a successful, mutually beneficial relationship over the past year, the renewal is set to further improve Rystad Energy’s penetration in African markets while strengthening ECP’s data and analytical expertise.

As an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to clients across the energy industry, Rystad Energy has emerged as the partner of choice for energy companies across the African energy landscape. The organization offers high-level information services, enabling energy professionals and companies from across the African energy landscape to make informed decisions. By engaging with energy companies, suppliers, financial professionals, NGOs and governments, the organization’s team of experienced analysts help guide business and energy development globally.

Meanwhile, representing the leading investment platform for the African energy sector, ECP is committed to driving sustainable investment in Africa’s diverse energy sector. Through a strong lineup of industry-focused events that unite African energy leaders, companies and stakeholders with global investors, as well as market-driven web content and investment reports, ECP facilitates global and intra-African investment on the back of data-driven dialogue.

With the partnership renewal, Rystad Energy will assist ECP on data content (https://bit.ly/3LZxN7w) and expert guidance to fulfill its mission of growing sustainable energy investments in Africa. By contributing data and analytics to ECP for the production of web content, investment reports and event-related content, Rystad Energy will be instrumental in bringing greater quality to ECP’s content and programming. On the other hand, with Rystad Energy looking at increasing its presence in African markets, the partnership enables Rystad Energy to play an active role in ECP’s upcoming events by presenting, moderating and participating. By integrating Rystad Energy’s knowledge and expertise with ECP’s reach and connections across the African energy landscape, the partnership will be instrumental for both companies as well as the wider African energy market.

“ECP is proud to once again partner with intelligence platform Rystad Energy. This partnership has and continues to be a critical asset for ECP as the company strives to improve investment and development across Africa. In 2022, with a lineup of three large-scale events in Senegal (https://bit.ly/3wTIVgN), Angola (https://bit.ly/38yXqhU) and South Sudan (https://bit.ly/3PSmVvt), the partnership will prove particularly valuable as ECP crafts market-driven programs and web content. We are looking forward to another year of strategic cooperation,” stated Laila Bastati, Managing Director, ECP.

Distributed by APO Group on behalf of Energy Capital & Power.

May 30, 2022

PHOTO-03-Arial-view-of-the-Mahiyanganaya-solar-power-project.jpeg

Colombo. Monday 30^th May 2022. Further expanding its portfolio, Resus Energy PLC, a forerunner in renewable energy, recently connected a 6.0MW ground mounted solar PV (photovoltaic) station to the national grid. This comes at a crucial time when the country is facing a massive power crisis resulting from fuel scarcity to operate thermal plants, which in turn results from a forex shortage and unaffordable global fuel prices. In this current situation, a higher level of renewable energy in our power generation mix is critical to combat the over-dependency of thermal power and to sustain a more energy secure nation.

Located in Rideemaliyedda, and connected to the Mahiyanganaya grid substation, the development rights of these projects were secured from the government’s Soorya Balasangramaya tender floated to procure 90 x 1MW Solar PV projects. Built at a cost of over Rs. 1 billion with state-of-the-art equipment encompassing tier-1 solar PV panels, top-of-the-range inverters, and other auxiliary equipment, the power station is expected to generate about 9 million units of electricity (9 GWh) annually. This is Resus Energy’s second solar PV site. Now together with its first site in Siyambalanduwa, Resus supplies 8 MW of solar power to the national grid.

The project was developed under extremely arduous conditions. Navigating through long lockdown periods, the project was badly affected by hyperinflation and scarcity of construction and other input materials; transportation challenges; forex crisis leading to inability to open LCs; and making suppliers settlements. Yet, Resus delivered the project on time keeping its responsibility and promise to the nation to support its crusade to expand renewable energy. With this one, Resus now operates 11 utility-scale grid-connected power stations with an aggregate capacity of about 24MW and estimated annual energy generation of over 60GWh.

“I salute our team that worked day and night to make this project a success under most challenging environments with material shortages, transportation restrictions due to fuel shortage, forex crisis, astronomical price increases in input materials leading to cost-overruns, and financing challenges. We still delivered this one despite operating in impossible conditions against all odds. This demonstrates our commitment to partake in fulfilling the country’s dream of becoming an energy secured nation”, said Kishan Nanayakkara, Managing Director, Resus Energy.

He further said that “this country is paying dearly because of renewable energy shortage. We are having blackouts impacting people’s lives and business and at the same time idling thermal plants due to fuel shortage. That’s ironic. Our economy is pushed to a perilous state for having to pay astronomical prices for fuel to even have a limited operation of our thermal plants. Resus Energy’s newly connected solar PV station gives a huge economic benefit to the nation, supplying electricity at about Rs.15/- unit for the next 20-years, which is below CEB’s current average selling price, enabling it to make a profit from each unit. Comparatively, the fuel cost of the Puttalam Coal Plant, the cheapest thermal plant, alone is over two and half times of our unit cost and is over six times in the case of diesel and furnace oil plants”.

“Sri Lanka being a signatory to the 2015-Paris Agreement on climate change is obligated to the implementation of SDGs in which SDG 7 is provision of Clean and Affordable Energy. Through our Nationally Determined Contributions (NDC) we have also pledged to reduce emissions by 30% with 20% to come from energy sector. Renewable energy is a huge element in meeting our promise to the world made through the Paris Accord and NDCs”, Nanayakkara further said.

As a company that is truly interested in people and the planet in pursuit of primary business goals, Resus Energy believes in creating a shared value that benefits all its stakeholders and towards this end. Resus consistently strive to ensure that its carbon footprint remains at a minimal level even as it scales up operations and ensure that none of its operations have negative impacts on the environment. Designed and developed using expert local knowledge, the latest technology and a true passion for nature conservation, Resus Energy projects are all planned and executed sustainably and responsibly. All project development budgets also include a considerable portion to develop the surrounding communities of each project.

Over the last few years, Resus Energy consistently won awards and accolades for its reporting and sustainability work from CA Sri Lanka and ACCA. It has also won merit award from South Asian Federation of Accountants (SAFA) and has also been a winner of the National Green Awards.

May 24, 2022

FTI Consulting’s Resilience Barometer® data shows that more energy companies struggled to secure finance in the past 12 months

JOHANNESBURG, South Africa, May 23, 2022/APO Group/ —Increased pressure to improve ESG and sustainability; demand-side pressure is driven by the rise in energy consumption; energy supply chain will become a source of opportunity and risk.

Download document (1): https://bit.ly/3PCnfy7

The year 2022 represents a critical inflection point in the way we think about energy and the global systems needed to find, produce, deliver and decarbonise it. Significant, era-defining events are happening all around us, all around the world, and all at a breakneck pace – shaping both short- and long-term structural considerations around energy and sustainability, according to a new report from FTI Consulting, Inc.

This report (https://bit.ly/3Gdv2yk) captures what some of the largest leading energy firms in the world are thinking about and planning for as they look at the energy transition. As countries look to shore up domestic energy supply chains and meet increasing demand, the decisions companies make today will reverberate for years – even decades – into the future.

Forty-five percent of energy companies surveyed believe they will face increased pressure to improve on environmental, social, and governance (ESG) and sustainability metrics, as compared to 36% of companies from other sectors.

FTI Consulting’s Resilience Barometer® data shows that more energy companies struggled to secure finance in the past 12 months compared with other sectors. This could reflect the increasing pressures that companies in the energy sector are facing around financing.

The entire supply chain will become a source of opportunity and risk. In fact, results from our annual global survey highlight that 49% of energy companies surveyed plan to conduct reviews of their supply chain and suppliers in the next 12 months in response to anticipated consumer activism.

This report (https://bit.ly/3POE5tZ) highlights the significant and mounting environmental pressures facing the industry, including the threat of regulatory action and assets becoming stranded before the end of their operational life; pressure from investors and reduced access to capital; and activists leveraging every available tool, from the courts through to the corporate governance system, to influence companies.

“The pressure to improve ESG now outstrips concerns about improving operating performance and increasing market share for energy companies,” said Christo Roux, a Senior Managing Director and Head of Business Transformation at FTI Consulting in South Africa. “To address ESG scrutiny, businesses need to review their supply chains and suppliers, especially as attention to ESG gains momentum.”

Methodology

The FTI Consulting Resilience Barometer® incorporates views from 4,100 decision-makers in large companies. Large companies are defined as an annual global turnover of >$50m and/or headcount of >250 and/or a balance sheet of >$43 million globally across 11 industries. The research was conducted via an online survey from 26 October to 10 November 2021. Results are weighted so that each country represents a similar proportion of the results.

Eighty percent of respondents are from G20 countries. For G20 respondents, the average global turnover of companies is USD$12.7billion and the average global headcount of companies is approximately 18,400.

Distributed by APO Group on behalf of FTI Consulting.

May 9, 2022

With the recent successful completion of the nation’s first comprehensive grid tied renewable energy microgrid project at the University of Moratuwa (UOM), DIMO, a leading diversified conglomerate in Sri Lanka, is now well equipped to implement microgrid systems for the local industries to ensure an uninterrupted power supply. DIMO will also provide microgrid services to the Maldives and rural regions in Africa where the company has already established its footprint through other engineering solutions.

As a company that continuously strives to reshape the green energy landscape of Sri Lanka, DIMO is providing advanced solutions for mini-hydro, bio mass, solar and wind power plants in the country. DIMO has also played a key role in the implementation of Sri Lanka’s first ever wind power project in Mannar and the successful completion of the nation’s first microgrid system is a true testament to DIMO’s commitment to implement innovative green energy initiatives.

The microgrid system at the UOM supplies uninterrupted power to the university despite the current power cuts faced by the country. Even during the 13-hour power cuts, the microgrid was capable of effectively managing the demand of the connected loads. DIMO implemented the microgrid system at UOM in collaboration with Lanka Electricity Company (LECO) and with the financial assistance of the Asian Development Bank (ADB). This project connects stand-alone grids to ensure an uninterrupted, renewable power supply throughout the distribution area at any time. The completed system consists of a 375kW of Solar PV, 418kWh of Battery Storage and a 1170kVA backup Diesel generator. With this project, UOM now can generate its power requirement within its own premises, without depending on the national power supply.

DIMO also partnered with German off-grid experts DHYBRID, a leading provider of renewable energy solutions with individualized control systems for hybrid energy supply, for this project. DHYBRID has implemented over 75 projects in more than 25 countries around the world. DHYBRID’s energy solutions combine power from multiple renewable energy sources including solar and wind, with the traditional grid, diesel powered generators and battery storage, while perfectly controlling these sources to effectively and efficiently meet the varied power requirements of the clients.

The microgrid system is a decentralised group of electricity sources and loads that are connected synchronously to the main power grid. A microgrid runs on two modes. The off-grid mode supplies power to the loads via energy sources without the support of the grid, whereas in the on-grid mode, the system stays synchronised with the grid, and any excessive power is fed to the grid. Microgrids integrate renewables into the energy mix intelligently and seamlessly balance the variable output of renewable energy while enabling the system to seamlessly transfer from on-grid to off-grid mode during power outages. Thus, the microgrid overcomes the transient nature of solar and wind energy through intelligently accommodating energy storage. With no human intervention, a microgrid can tap into other resources including grid, diesel generators or battery storage, when the renewable energy source is unavailable. Microgrids have been successfully implemented in smart cities in USA, Australia and other developed regions, in rural areas and isolated electrification around the world.

In Sri Lanka, power from hydro plants have dropped below 28% during the dry season and this, along with the prevailing forex crisis, has led to extended power cuts in the country. The demand for energy will continue to rise, and even if commercial and industrial sectors have implemented solar power, it is of no use during power outages. Microgrids allow renewable energy to be utilised during power outages as well.

Mr. Gahanath Pandithage, Group CEO of DIMO, said, “The completion of the historic microgrid project is a great step towards the nation’s future of adapting renewable energy. During these challenging times, the development of such solutions is vital in the nation’s progress. Together with our partners, DIMO will continue to implement innovative projects similar to this microgrid project, throughout our journey of fuelling the dreams and aspirations of the communities, we serve in.”

This is a timely concept offering an ideal solution for many industries including business centres, factories, resorts, hospitals, universities, data centres and more. Given the prevailing continuous power interruptions, there are many cases of operational shutdowns which directly affect the nation’s economic survival. Microgrid systems are a perfect solution for such scenarios and especially useful for industries such as glass and ceramic, as they incur huge operational losses due to even the most minuscule of power outages.

The key advantages of microgrids are power reliability, energy resilience and reducing costs through the efficient management of energy supply. At any given time, the microgrid will identify the most effective power source within the system and supply it with power. The result of which is a seamless transition between power sources that allows an uninterrupted power supply.

Backed by the resounding success of the comprehensive project at the UOM, DIMO is now well-geared to offer microgrid systems as an uninterrupted power supply solution for multiple industries in Sri Lanka.

May 6, 2022

CrossBoundary Energy is seeing increased demand for its hybrid power systems designed specifically for the mining sector

NAIROBI, Kenya, May 5, 2022/APO Group/ —

Momentum is growing in the opening quarters of 2022 for hybrid power solutions catered to the mining industry in Africa. The approval of a solar and battery system at the Balama Graphite Operation in Mozambique reflects a move towards cost savings and sustainability given increasing risks associated with global energy supply chains.

The escalation in energy prices due to the conflict between Russia and Ukraine are hurting countries most heavily reliant on energy imports. In African markets, high consumption industrial and commercial enterprises are feeling the pinch. South Africa, for example, recently put out a call for proposals to private producers to supply an additional 2,600 megawatts of renewable energy.

President of CrossBoundary Energy Pieter Joubert says: “At the moment, solar and wind are cheaper and cleaner electricity options for commercial and industrial companies, particularly mining houses. The mining industry is looking to improve cost structures to increase margins and ensure a strong balance sheet during these uncertain times. Renewable energy solutions can typically save up to 30% in electricity costs and generate an attractive return on capital due to the low upfront capital costs.”

As a result, CrossBoundary Energy is seeing increased demand for its hybrid power systems designed specifically for the mining sector. CrossBoundary Energy’s approach to the industrial renewable energy transition has brought to bear some of the most significant mining hybrid projects in Africa to launch in the last several months:

Balama Graphite Operation – Mozambique

On average, the 11.25 MWp solar and 8.5 MW/MWh battery energy storage system (BESS) at Balama Graphite Operation will reduce diesel consumption for power generation by 35%. During peak daylight times, the solar battery system will be able to supply up to 100% of Balama’s power requirements, taking advantage of the high solar irradiation potential of the site location. The renewable energy system is forecast to save ~US$8 per tonne at a 15kt per month production rate.

CrossBoundary Energy is delivering this project under a build-own-operate-transfer arrangement, comprising a 10-year operating lease and an operating and maintenance contract. The solar battery system was approved by Syrah Resources’ board of directors in April 2022 and is scheduled to be commissioned and operating before the end of March 2023.

QIT Madagascar Minerals (QMM) – Madagascar

The 8MW solar, 12MW wind, & 8.25MW BESS solution located in Fort Dauphin, Anosy, Madagascar, will provide 60% of QMM’s energy, making it the largest renewable penetration project for a mine in Africa. The project is projected to reduce the mineral sands operation’s annual carbon dioxide emissions by approximately 40,000 tonnes. Groundbreaking took place in December 2021, with operations expected to start by mid-2022. The project is funded by CrossBoundary Energy via a 20-year power purchase agreement with Rio Tinto which will see CrossBoundary Energy build, own and operate the hybrid renewable energy plant.

Molo Graphite Mine – Madagascar

The 2.5MW solar, 1MWh BESS and 3.3MW thermal energy system at Molo Graphite Mine will reduce its total cost of electricity, lower its all-in sustaining costs, as well as minimize its carbon emissions. CrossBoundary will supply the hybrid solar and thermal energy system to power operations at the NextSource Materials’ owned mine for a 20-year term. The system has been designed to scale with Molo Graphite Mine and ensure 100% power availability.

Matthew Fredericks, CrossBoundary Energy’s Director of Business Development for Mining explains: “We have seen a massive shift in the mindset of mining houses, particularly executive decision-making, not just in Africa but globally. The requirement to control operational costs coupled with the pressure to reduce greenhouse gasses has never been more evident than in the past few months. CrossBoundary Energy’s fully funded solutions and ability to move swiftly intersect beautifully with the decreasing costs of renewable technology. Using our solutions, mining houses are able to focus their attention and internal funds on core revenue generating processes while ensuring long-term cheaper, more efficient, and cleaner energy projects.”

The ongoing energy transition and future of mining are both interrelated themes of Mining Indaba 2022 conference taking place from 9-12 May 2022 in Cape Town, South Africa. CrossBoundary Energy will be on ground at the conference presenting its mining hybrid energy solutions.

May 4, 2022

Rystad Energy will support the African Energy Chamber in its mandate to provide energy stakeholders with market-driven intelligence and insights that can help boost the exploitation of domestic resources to address energy poverty and fuel economic growth

JOHANNESBURG, South Africa, May 4, 2022/APO Group/ —

The African Energy Chamber (AEC) (www.EnergyChamber.org), the voice of the African energy sector, is proud to announce the signing of a Partnership Agreement with multinational energy market intelligence firm, Rystad Energy.

As part of the agreement, Rystad Energy is now officially African Energy Week 2022’s Intelligence Partner and will lead vital energy market related discussions at AEW 2022, AEC’s leading energy sector investment platform for the oil and gas industry – taking place on 18 – 21 October 2022 in Cape Town.

Rystad Energy will be moderating and participating in panel discussions and technical workshops to share the latest energy market trends, updates and forecasts during the 2022, 2023 and 2024 editions of Africa’s premier event for the oil and gas sector, AEW.

In addition, Rystad Energy will launch two Africa-focused webinars in the build-up to AEW in support of the event to share key market findings, AEW discussion topics and their impact on Africa’s energy environment.

With the AEC determined to improve dialogue on industry changes, challenges and opportunities between market players, investors and regulatory authorities, the participation of Rystad Energy at AEW events will be crucial in enabling the development of market-driven solutions that will empower Africa to maximize the exploration, production, exploitation and monetization of domestic oil and gas energy resources to address energy poverty while fueling industry growth.

The AEC and Rystad Energy will also cooperate on research and the compilation of “The State of African Energy 2023” report, a detailed analysis of how regulations, merger and acquisitions, and of exploration, production and infrastructure developments are shaping Africa’s hydrocarbons landscape.

Rystad Energy’s top-grade market insights will be vital in helping African energy market stakeholders, investors and governments align operations, business models, investment strategies and policies with current and future energy market changes to optimize sector operations.

With factors such as a lack of adequate investments and infrastructure, political instability, global climate policies and investor-scary fiscal terms and regimes hindering the growth of Africa’s hydrocarbons market, the partnership between the AEC and Rystad Energy will provide the industry with best practices and policy recommendations that will take the continent’s oil and gas sector to the next level.

“Africa is extremely rich in natural resources, and its full potential remains unknown. Our data at Rystad Energy shows that exploration expenditure in oil and gas in Africa is approximately half of that for the Americas, and on par with Europe. This is despite the fact that Africa has a prospective coastline of 30.000 km. We should multiply profitable investments in African energy to realize its full potential as the world’s richest natural resource region, and to enable economic growth for its quickly expanding population,” says Per Magnus Nysveen, Co-Founder and Head of Analysis at Rystad Energy.

Moreover, with Rystad Energy making the “Energy transition a member of its solution family,” insights from the research firm and participation at AEW events will be critical in helping Africa to develop its own energy transition roadmap that is fit for the continent and prioritizes the exploitation of domestic energy resources to make energy poverty history by 2030.

“With over 600 million people across the continent still living in energy poverty and up to 900 million living without access to clean cooking, sterling market recommendations and insights Rystad Energy provides, are critical in helping Africa to expand the oil and gas market and in ensuring the use of these resources to enhance energy access. The AEC is proud to be a partner of one of the world’s leading global information providers, Rystad Energy,” states Tomás C. Gerbasio, Strategy and Business Development Director – African Energy Week 2022.

Since its launch in 2004, Rystad Energy has become the global energy industry’s knowledge hub through the provision of data, tools, analytics and consultancy services to players within the oil and gas markets, supply chains, renewables, commodity markets and the energy transition.

The research company offers guidance to energy companies, suppliers, financial professionals, NGOs and governments to help them navigate through market barriers and as such the partnership with AEC will be instrumental in helping Africa’s energy market stakeholders to make informed decisions regarding how best to enhance oil and gas exploration, production and infrastructure development to address chronic energy shortages and high prices that are crippling African economies.

With “Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment,” the main theme at AEW 2022, the partnership between the AEC and Rystad Energy will be critical in providing information which both continental and regional investors can leverage to accelerate energy sector investments and boost private sector participation within Africa’s energy sector.

April 18, 2022

Driven by the market-focused event theme, AEW 2022 places an emphasis on current global energy affairs, gas as a key play and financing exploration

JOHANNESBURG, South Africa, April 7, 2022, Africa’s energy landscape is on the precipice of a revolution driven by energy transition pressures, capital expenditure trends, and socioeconomic demands. In the 2022 context, these trends have only been exacerbated by global geopolitical conflicts such as the Russia-Ukraine situation disrupting global supply networks, declining costs of renewable energy technologies enhancing green energy adoption, and the rising role of African producers in the global energy chain altering the trajectory of Africa’s energy future. Accordingly, taking place in Cape Town from October 18-21, African Energy Week (AEW) 2022 is proud to announce its theme, ‘Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment,’ consolidating the event’s mandate to make energy poverty history by 2030 into an actionable agenda.

The solution to Africa’s energy crisis is clear: develop the continent’s natural resources and put in place the necessary infrastructure to electrify Africa. However, natural declines in legacy projects, the lack of investment in new exploration, and inadequate infrastructure have caused significant delays in making energy poverty history. In this regard, and considering mounting pressures for African producers to increase production in light of global supply constraints, Africa needs to significantly improve its exploration, and both international oil companies (IOC) and national oil companies (NOC) have a role to play.

2022 is expected to be a year of exploration in Africa, with nine high-impact wells in the drilling schedule, results of as many as 14 exploration licensing rounds anticipated, and sizeable discoveries already being made in high potential markets. According to the African Energy Chamber’s (AEC) Q1 2022 report, exploration in 2022 will include a mixture of majors, independents, and local firms of which notable activities include Shell’s high-profile well offshore Namibia, which the major has already started drilling; Italy’s Eni conducting exploration at its Mlima-1 wildcat block in Kenya; and TotalEnergies’ exploration activities on the Venus prospect in Namibia. Despite this progress, significant levels of investment are still required if Africa is to scale-up production to meet global demand, improve domestic refining capacity, and make energy poverty history by 2030. This is why AEW 2022 has and continues to push for enhanced investment in the exploration space because energy poverty cannot be alleviated if upstream activities do not accelerate.

“As the organizer of AEW and the voice of the African energy sector, the AEC is committed to making energy poverty history, making a strong case for a diversified and integrated energy mix in Africa. In order to achieve poverty alleviation, Africa needs to exploit every single natural resource available on the continent, including oil, gas, renewables, hydrogen, and biofuels. Africa’s energy future hinges on both the capacity of the continent – in terms of human, operational, and management – as well as immediate and sizable investment. This is why AEW 2022 has chosen this theme, as we believe that exploring and investing in Africa’s energy future while driving enabling environments, will allow the continent to reach its developmental goals and lift millions out of energy poverty,” states Leon van der Merwe, AEW Conference Director.

AEW 2022 is centered around the role Africa’s resources will play in meeting global energy demand while driving a just and sustainable energy transition. Specifically, the event prioritizes natural gas, recognizing the potential of this clean and widely available resource to electrify Africa, ease Europe’s energy crisis and significantly reduce carbon emissions. In the 2022 context, whereby the war on Ukraine and the climate crisis have dramatically changed global priorities, African gas developments have emerged as the solution. In this respect, AEW 2022 is fully committed to ensuring the continent realizes its gas growth potential and will challenge African leaders to fast-track gas project approvals specifically regarding Liquefied Natural Gas (LNG).

African LNG represents both high potential and a particularly lucrative market with major projects already underway across the continent. Projects such as the 3.4 million tons per annum (mtpa) Coral Floating LNG project, the 12.8 mtpa Mozambique LNG project and the 1.2 Rovuma LNG project in Mozambique as well as the $4.8 billion Grand Tortue Ahmeyim gas project co-developed by Senegal and Mauritania, represent just some of the continent’s major LNG developments underway. Gas represents a key play in Africa and will be at the forefront of AEW 2022’s event agenda.

Meanwhile, enhancing investment and development within the African gas sector will be a key driver of the continent’s just transition. The development of LNG will meet domestic and global demand, improve export earnings for key producing countries and improve infrastructure such as gas-to-power and trade. However, gas developments will also enable the development of various other sectors such as renewables and hydrogen. Accordingly, at AEW 2022, building gas projects and infrastructure that can be used for renewables will be a key focus. This replicates models utilized by international players such as Norway and Germany and will be critical for the continent as it moves towards a clean energy future.

By implementing the theme ‘Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment,’ AEW 2022 has centered all event dialogue, discussion and engagement around Africa’s energy future, recognizing the role that every energy resource, company and stakeholder has to play. In Cape Town in October, AEW 2022 will unite Africa’s energy ministers and NOCs with global investors, enabling the promotion of enabling environments so that investors can be introduced to African opportunities.

Distributed by APO Group on behalf of African Energy Chamber.

April 9, 2022

Countries in the MSGBC region including Senegal and Mauritania are set to record a gas market boom as key projects come online from as early as 2023

JOHANNESBURG, South Africa, April 7, 2022/ — Since major gas discoveries were made between 2014 and 2017, the MSGBC region, comprising Mauritania, Senegal, the Gambia, Guinea-Bissau and Guinea-Conakry, has emerged as a highly competitive investment destination for large-scale gas projects. Senegal and Mauritania are at the forefront of this revolution with the implementation of regulatory reforms, such as the 2020 Gas Code, and increased exploration activities driving the gas monetization and exploitation agenda.

With projects such as the $4.8 billion Greater Tortue Ahmeyim (GTA) liquefied natural gas (LNG) project coming online in 2023, Senegal and Mauritania are well positioned to address domestic energy needs while also helping to ensure energy security across the region and in international markets such as Europe. The project is expected to unlock up to 15 trillion cubic feet (tcf) of gas and as much as 2.5 million tons of LNG per year in its first phase. GTA operators bp and Kosmos expect the project to produce up to 10 million metric tons of LNG per annum once all three phases begin operations.

In addition, the anticipated 2023 final investment decision for the Yakaar-Teranga field development – which has an estimated 20 tcf of natural gas – by bp, Kosmos Energy and national oil company, Petrosen, will further boost Senegal’s gas market while driving electrification across the region. The implementation of gas-to-power projects in Senegal are a testimony of efforts by the MSGBC region to utilize gas reserves to improve energy access.

Moreover, to ensure the gas market reaches its full potential, Mauritania and Senegal have committed to boosting exploration with the Senegalese government expected to announce the winners of its 2020 Licensing Round as well as launch the AGC Shallow Block Licensing Round in 2022. Mauritania is also in the process of negotiating the licenses for exploration in 19 offshore blocks. With exploration and production projects under way in the Gambia, Guinea-Bissau and Guinea-Conakry, the MSGBC region’s gas market is headed for success.

“Positive developments recorded in the MSGBC region in recent years, however, significant investments are still required to increase exploration activities, ramp up production and develop the required infrastructure such as ports, pipelines and refineries, vital for optimal monetization and exploitation of energy resources,” states NJ Ayuk, Executive Chairman of the AEC, adding that, “With the window to secure investment for hydrocarbons narrowing, the time to negotiate and sign deals is now.”

Meanwhile, with MSGBC countries strategically located to export to Europe by sea, it is vital for increased investments in port infrastructure to maximize the monetization of gas resources. Both Senegal and Mauritania have been leading in this regard with the Senegalese government in partnership with Dubai-based port operator, DP World, kickstarting the construction of the ‘Port of the Future’, a $1 billion deep-water port in Ndayane. The government of Mauritania has also announced its plan to make the port city of Nouadhibou into a regional gas processing, import and export hub to improve the country’s maritime and logistics and enhance the trading of energy resources with international markets.

Under the theme ‘Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment,’ Africa’s premier energy event, African Energy Week (AEW), which will take place from 18 – 21 October 2022 in Cape Town, will discuss investment opportunities across the MSGBC region’s gas sector. At AEW 2022, energy leaders from the MSGBC region including H.E. Aissatou Sophie Gladima, Senegal’s Minister of Petroleum and Energies will participate in panel discussions, investor forums and high-level meetings to drive dialogue around the challenges and opportunities across Africa’s entire energy value chain.

Distributed by APO Group on behalf of African Energy Chamber.

April 8, 2022

The 2.25-billion-ton iron ore mine has the potential to improve GDP, create thousands of jobs and position the country as a top exporter, if legal disputes and infrastructure delays are addressed

CAPE TOWN, South Africa, April 6, 2022/APO Group/ —

By Charné Hundermark, the Deputy Editor at Energy Capital & Power (www.EnergyCapitalPower.com)

Located in the southern Nzérékoré region of Guinea-Conakry, the Simandou mine holds the largest deposits of high-grade iron ore in the world – an essential element for the production of steel. With the potential of producing up to 150 million tons of iron-ore yearly, the mine represents a key enabler to increasing the country’s gross domestic product, creating thousands of jobs and positioning Guinea as a globally competitive mineral exporter. However, uncertainty regarding national interests and legal disputes continue to delay the project. By addressing these challenges and offering a mutually beneficial and attainable solution, the government can kickstart development and usher in a new era of project success in Guinea-Conakry.

Mineral Development as a Catalyst for Economic Growth

Guinea has already managed to establish itself as a global mineral producer and is recognized as the second largest producer of bauxite in the world, supplying 22% of the world’s bauxite resources. Other key markets in the country include gold and diamonds, and with mines such as Simandou, the country is well positioned to become a top iron ore producer and exporter. The role the Simandou mine will play in accelerating economic development is well defined.

Firstly, with the potential to produce up to 150 million tons of iron ore annually, the mine can tap into global supply chains and become the preferred supplier to international markets, bringing in new revenue streams for the country. Specifically, China, which is currently pursuing alternative suppliers in a bid to reduce its reliance on Australian reserves, is ready and willing to buy Guinean iron ore. Secondly, the mine will create thousands of jobs for the local population, trigger new infrastructure development – particularly regarding transportation – and improve capacity building and skills transfer for the community. Finally, the mine will increase export earnings, enabling the reinjection of capital in various other sectors of the economy such as energy, agriculture and tourism.

Addressing Development Delays

Despite reserve discoveries in 1997, the Simandou mine has faced years of challenges hindering development. Most notably, disagreements between miners and the government, political instability and change of leadership, inadequate infrastructure and corruption have significantly restricted progress. To combat these challenges and kickstart development, in March 2022, after having halted operations at the mine, the interim government signed an agreement with mine developers Rio Tinto – with a 45.05% interest in blocks three and four (the southern half of the deposit) – and Chinese-backed Winning Consortium Simandou (WCS) – who won the tenders for Blocks one and two in 2019 (the northern half). Comprising specific growth-driven terms, the deal will ensure the rapid development of the mine.

Firstly, the agreement will see Rio Tinto and WCS co-developing the 670 km Transguinéen railway and a port – of which the government will hold, in addition to the mine, a 15% stake-ensuring the necessary infrastructure is in place to export to global markets. Upon completion, this infrastructure will become state property, allowing the government more control of the infrastructure itself. With inadequate infrastructure representing a key hindrance to the mine’s development, this deal will be critical in maximizing the mine’s potential and monetizing reserves. Secondly, the government has included specific local content provisions in the agreement, ensuring the local population benefits from job creation, capacity building and skills development. This will be particularly important for the development of the local economy, especially since both mine developers are foreign.

Finally, under the terms of the agreement, ambitious project deadlines have been introduced in which penalties will be imposed if unmet. Specifically, infrastructure should be completed by 2024 and production commence by March 31, 2025, ensuring a clear timeline by which investors and developers can abide. Considering the nearly two decades of project delays, the project deadlines will enable the rapid development of the mine, ensuring an end to project uncertainty and delays.

The Simandou mine could usher in a new era of socioeconomic growth for the country while positioning Guinea as not only a top bauxite producer and exporter but an iron ore one. This new deal represents a turning point for the mine and marks an important step in the journey towards first production.

Newer Posts

Older Posts

Windforce Registers Steady Performance Amidst Turbulent Times

Rystad Energy, Energy Capital & Power Renew Knowledge Partnership

Resus Energy connects 6.0 MW Solar PV power plant to national grid amid raging power crisis

Energy Resilience in 2022 – The case for energy transition is stronger than ever

DIMO to revitalize Sri Lanka’s green energy development with Microgrid systems Completes Sri Lanka’s first ever fully operational microgrid system at the University of Moratuwa

Approved Solar System at Mozambique’s Balama Mine Reflects Priority of Energy Transition for Mining in Africa

Rystad Energy Becomes African Energy Week’s Intelligence Partner to Support Key Industry Dialogue and Provide Market Intelligence

African Energy Week (AEW) 2022 is Committed to Exploring and Investing in Africa’s Energy Future while Driving an Enabling Environment

MSGBC Gas Market Set For Massive Growth

Positioning Guinea’s 2.2 Billion Ton Simandou Mine as a Key Driver of Economic Growth (By Charné Hundermark)