Megaproject

BLACKRIDGE

How African Pipeline Projects Are Securing Billions In FinancingAfrica is rolling out several transformative midstream projects, which aim to deliver the continent’s hydrocarbon resources to energy-hungry markets. To accelerate access to finance for these capital-intensive projects, strategies such as de-risking investments through government guarantees, leveraging blended finance models and enhancing cross-border regulatory tools and frameworks are being employed. The annual Invest in African Energy forum in Paris – which connects African energy and infrastructure projects with global investors – will unite traditional lenders and alternative sources of capital to advance Africa’s major pipeline projects and broader energy development goals. EACOP Targets Chinese Lenders The $5-billion East African Crude Oil Pipeline (EACOP) has already raised $2 billion in equity funding from its developers – namely, French multinational TotalEnergies, China National Offshore Oil Corporation, Uganda National Oil Company (UNOC) and Tanzania Petroleum Development Company. Designed to transport crude oil from Uganda’s oil fields to the Port of Tanga in Tanzania, the 1,443-km pipeline is seeking an additional $3 billion in debt financing, which it aims to secure from Chinese financiers including the Export-Import Bank of China and China Export & Credit Insurance Corporation (Sinosure). In June 2024, UNOC invested an additional $35 million in the project to help bridge the gap between equity and debt financing. The majority of the project’s budget will be allocated to the engineering, procurement, construction and management contractor and the supply of pipeline equipment, including line pipes and pumping stations. The project is being financed on a 60:40 debt-equity ratio and is on track to be one of the largest investments made in both Tanzania and Uganda to date. AKK Pipeline Secures Sovereign Guarantee The Ajaokuta–Kaduna–Kano (AKK) project is a strategic gas infrastructure initiative in Nigeria, designed to transport natural gas from the southern Niger Delta region to the northern part of the country. The 614-km pipeline will support several gas-fired power plants along its route, including new facilities in Kaduna and Kano, and is expected to significantly improve power availability in Nigeria’s northern regions through the addition of 3,600 MW to the national grid. With an estimated cost of $2.6 billion and target completion date of 2025, the project is being financed through a combination of public and private funds, with the state-owned Nigerian National Petroleum Corporation serving as the primary financier. The project has also secured international lenders including the Industrial and Commercial Bank of China and Bank of China, underscoring China’s strategic interest in Nigeria’s energy infrastructure. The Nigerian Federal Government has provided a sovereign guarantee to secure the loans – backing 85% of the total pipeline cost – which has proven critical to assuring lenders of the project’s viability and commitment to its completion. NMGP Establishes Investment Company Set to become the second-longest pipeline in the world, the Nigeria-Morocco Gas Pipeline (NMGP) will cross 13 African countries, helping to meet the energy demand of 400 million West Africans, while delivering Nigerian gas to Europe. A final investment decision – estimated at $25 billion – is expected to be made by the end of this year. The project has already garnered significant funding from OPEC, which is currently being used to fund the Front-End Engineering Design study. Topographic surveys covering Morocco, Mauritania and Senegal were also launched in May 2024. To coordinate the financing, construction and operations of the planned pipeline, Morocco’s National Office of Hydrocarbons and Mining has announced the establishment of a dedicated company later this year, the capital of which will be open to global investors. IAE 2025 is an exclusive forum designed to facilitate investment between African energy markets and global investors. Taking place May 13-14, 2025 in Paris, the event offers delegates two days of intensive engagement with industry experts, project developers, investors and policymakers. For more information, please visit www.invest-africa-energy.com. To sponsor or participate as a delegate, please contact sales@energycapitalpower.com.

oil-gas

Aug 22, 2024

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