March 2020 / Focus Africa

Zambia has signed a contract of more than $824 million with a subsidiary of China Railway Construction Corporation to upgrade a rail line, the company said on Wednesday. China Civil Engineering Construction Corporation will rehabilitate the railway line in southern Zambia over a period of eight years, China Railway said in a statement. The railway has a total length of 648.26 km (403 miles), the statement said, adding that the contract value of the project amounted to approximately $824.87 million.

Standard Bank Group Ltd.’s South African unit sold a $200 million green bond to the International Finance Corp. in the largest sale of its kind from the continent yet.

The 10-year facility will be used to finance projects in renewable energy, energy efficiency, water efficiency and the development of environmentally friendly buildings, the Johannesburg-based lender said in an email. The debt will be listed on the London Stock Exchange, making it South Africa’s first offshore green-bond issuance, it said.

The deal comes amid a global push toward sustainable debt, with record sales in 2019 as investors increasingly factor in the environment and climate change. Commercial banks currently provide 45% of South Africa’s financing for renewable energy and energy-efficient projects, according to the IFC, which estimates that the country has a “climate-smart investment potential” of $588 billion between now and 2030.

“We hope it will catalyze interest in green investments from other actors in the country,” IFC South Africa Country Manager Adamou Labara said in a statement. Projects funded by the bond have the potential to reduce annual greenhouse gas emissions by 742,000 tons, or nearly 3.7 million tons over a five-year period, according to IFC estimates.

Acorn Project (Two) LLP, a closely held, Nairobi-based property developer and manager, raised 4.26 billion shillings ($41 million) in a debut Kenyan green-bond offering in October last year. Standard Bank’s Stanbic Bank Kenya Ltd. was the lead arranger for that deal.

MTN will invest about N600 billion (R32 billion) in Nigeria’s network, Africa’s largest mobile phone operator announced on Sunday.

The investment will be made over the next three years.

The South African-based company said this investment will enable it to accelerate its 4G network expansion, deepen population coverage and support the Federal Government’s broadband initiative.

"We are excited about the possibilities that the transition to digital presents for our business, and the growth and development of Nigeria.”

Expanding 4G network coverage to deliver high-speed internet to more people nation-wide and data revenue growth remain in focus, said the company.

“We expect growth in voice revenue to remain healthy. We continue to make good progress with the expansion of our super-agent network and are confident that the expanded service offerings will position us to effectively drive broader financial inclusion as well as roll out the payment service bank seamlessly, once we receive a licence.”

In the third quarter, MTN Nigeria focused on several initiatives to enhance coverage and drive data usage penetration.

MTN Nigeria’s 4G population coverage rose by 8.4 pp to 43.8%, giving people in 68 additional cities access to 4G.

Rwanda last week signed signed a memorandum of understanding with the United Nations to host the only big data regional hub for Africa. The hub will be set up at the National Institute of Statistics (NISR) Training Center and Data Science Campus in the capital Kigali.

An assembly of the Global Working Group, UN’s body in data division, agreed during a meeting in the Rwandan capital in May last year to set up such hubs across various regions of the world to develop new capabilities in the use of big data and modern technology.

During the meeting, Rwanda offered an opportunity to house Africa’s hub which will support capability development in the area of big data for official statistics for Africa. Three other hubs will be set up in China, Brazil and the United Arab Emirates with specialised functions.

NISR is collaborating with the Ethiopia-based UN Economic Commission for Africa (ECA) Center for Statistics to set up the hub in Rwanda. The centre is expected to begin operations by the end of this year, according to NISR deputy Director-General, Ivan Murenzi.

“The potential gain for us as a country is that this hub will be pulling potential experts in data science to carry out training sessions. We will be accommodating more people,” Murenzi told The New Times.

About big data hub

With Rwanda’s experience in drone technology, the hub will, among others, execute projects of satellite imagery and other remote-sensing data using drones in environment and agricultural statistics such as crop acreage and crop yield.

It will as well lodge mobile telephone data for tourism, population and migration statistics, road traffic data and value added tax data for faster economic indicators.

The hub will also avail unfiltered flight data to monitor human mobility by enabling global coverage of the Earth’s land surface and an Open Street Map - a free, editable map of the entire planet.

Other technologies include an automatic identification system or vessel tracking through satellite data that give a complete situational picture of global vessel activity.

Through a global digital platform, UN will provide all 193 member states of the Statistical Commission with friction-free access to those global data sources using cloud services, including Alibaba Cloud, Amazon Web Services, Google Cloud Platform and Microsoft’s Azure.

The goal is to enable international collaboration on and sharing of data and expertise.

In 2014, the commission agreed to create the Global Working Group on Big Data for Official Statistics to further investigate the benefits and challenges of Big Data, including the potential for monitoring and reporting on the SDGs.

Data industry in Rwanda

As most countries embark on the 4th industrial revolution, according to NISR, data has proved to be a natural resource offering unprecedented benefits to economies by powering innovation ecosystems in science and technology.

In 2017, Rwanda developed a data revolution policy which mandates NISR to build big data and analytics capabilities.

As part of the country's bid to build a data industry, Kigali has in recent years created synergies with a pool of world class training academies, including two African Centers of excellence in data science and Internet of things, African Institute of Mathematical Sciences (AIMS) and Carnegie Mellon University which produce specialised human capital in data sciences.

Anadarko Petroleum Corporation has sold its assets in the Jubilee Field and the Tweneboah-Enyera-Ntomme (TEN) Project to its global competitor, TOTAL S.A.

The company used 13 years to nurture its two stakes in Ghana’s foremost oil and gas fields for them to be worth $2.5 billion in a deal that is now set to introduce the French oil giant, TOTAL S.A., into the country’s upstream petroleum sector.

Despite witnessing four major transfers of assets, technically called assigning and assumption of interest, in the period following oil discovery in 2007, none of the sales hit the one billion US dollar mark.

And if one is minded to extend it to the general economy, the Anadarko-TOTAL S.A. deal could as well be the ‘mother of all takeovers’ in the history of mergers and acquisitions (M&As) in the country.

Mr Michael Cobblah, who has led the successful execution of series of M&As in the country, told the Graphic Business on March 2 that “in recent times, I am not sure there has been a deal worth up to that amount”.

Sabre-PetroSA

Until the Anadarko-TOTAL S.A. deal last year, the priciest takeover in the industry, which was also the second of its kind, involved the controversial acquisition of Sabre Oil and Gas Holdings Ghana Limited by PetroSA in 2012.

It involved the takeover of Sabre’s operations in Ghana, which had a 4.05 per cent stake in the Jubilee Fields, South Africa’s national oil company.

That deal was reportedly worth $480 million although PetroSA later reported that the value had increased to $500 million after including “contingencies” in the cost of transaction.

Be it $480 million or $500 million, the value of that transaction is now five times lower than the $2.5 billion that TOTAL S.A. reportedly agreed to pay for Anadarko’s assets in Ghana.

And there are genuine reasons why.

Volume of assets

Although both sales occurred in fields that were producing oil in the Jubilee Fields (in part), Anadarko used more years to nurture its assets than Sabre did prior to the sale.

Also, this is the first time that an oil exploration and production company has sold such a sizeable amount of its interest in an oil filed that is in active production in Ghana.

Thus, beyond the value, the deal is also the largest transfer of interest in the industry.

Until the sale last year, Anadarko had been operating in Ghana since 2006, within which period it owned 24.077 per cent in the Jubilee Field, which is Ghana’s first and jewel oil field, and 17 per cent in the TEN Project, an integrated oil and gas project.

Now, those assets are set to become the assets of TOTAL S.A., the Paris-based E&P firm that reported revenue of about $209.4 billion in 2018, should the government approve the transaction.

Other sales

The petroleum sector witnessed its first acquisition in May 2011 when the E.O. Group, a Ghanaian-owned firm, sold its stake in the Jubilee Fields to Tullow Oil Ghana.

The transaction involved the transfer of the company’s 3.5 per cent stake in the field to the operator in return for $305 million.

After that transaction came the Sabre-PetroSA deal in 2012 which was followed by six years of no transfers in the sector.

In 2018, however, Norwegian billionaire, Mr Kjell Inge Roekke, made a strong entry into the country through a controversial deal that introduced his petroleum company, Aker Energy, into the country.

The company paid $100 million for Hess Ghana’s 50 per cent stake in the Deepwater Tano Cape Three Points block (DWT/CTP).

Genesis of Andarko sale

But how did the Anadarko-TOTAL S.A. deal come into being?

Last year, Occidental Petroleum, an American petroleum company, acquired the global operations of Anadarko in a transaction that would later introduce TOTAL S.A. into Africa’s burgeoning upstream petroleum sector.

As part of the agreement to acquire Anadarko, Occidental agreed to sell Anadarko’s operations in Africa to TOTAL SA.

That transaction led to the transfer of Anadarko’s assets in Ghana, Mozambique, Algeria and South Africa to TOTAL S.A. at $8.8 billion.

If one is minded to extend it to the general economy, the Anadarko-TOTAL S.A. deal of $2.5 billion could, as well, be the ‘mother of all takeovers’ in the history of mergers and acquisitions (M&As) in the country.

U.S.-based Railnet International plans to invest an estimated $11 billion in a modern railway line and high speed trains linking Zambia, Zimbabwe and Mozambique, its chief executive said on Sunday.

Railnet CEO Donald Kress said in an interview his railway development and construction company was in talks with governments in the three countries and signed an agreement to start feasibility studies in Zambia.

“We have a group known as Magcor International and their CEO has arranged financing through a group of investors,” Kress told Reuters on Sunday following the signing of an agreement on Saturday.

“Until we have signed a contract with the investors, they have requested to remain anonymous,” Kress said in an interview.

The investment in the project, running from Zambia’s Copperbelt province to the port of Beira in Mozambique via Harare in Zimbabwe includes the cost of locomotives and wagons, he said.

Feasibility studies were expected to begin in the next six weeks and would be followed by detailed engineering design for the project on the Zambian side, Kress said.

Construction was expected to begin in January 2021, Kress said, adding that Railnet would replace the existing system to allow freight trains to travel at 120 km/hour and passenger trains at 160 km/hour.

Zambia’s Transport and Communication Permanent Secretary Misheck Lungu, who signed the agreement for Zambia said Railnet would build the new railway line parallel to the existing old one.

Lungu said the project would enable business including mining companies in Africa’s second-largest copper producer to transport bulk cargo by railway instead of using roads.

Railnet would operate the modern railway for a number of years and hand it over to the government after recovering its investment from the profit made, Lungu said.

The US $200m Nigeria Electrification Project has officially been launched by Rural Electricity Agency (REA). Managing Director of REA, Mr. Ahmad Salihijo spoke during the launch ceremony and said that the project aims to address the energy access challenge through mini-grids, the solar home systems and the Energising Education Programme (EEP) of the federal government.

The project  which will commence in the next five months, will provide 500,000 Nigerians in 105,000 rural households with off-grid electricity. The funds, which were sourced from the African Development Bank (AfDB), the agency said, would also enable eight universities and 20,000 micro, small and medium enterprises (MSMEs) to get access to reliable sources of energy as well as to stop the emission of 1.69 million tons of CO2 emissions in line with the Nigeria’s commitment to combating climate change.

Nigeria Electrification Project

Mr. Ahmad Salihijo explained that four components are currently structured under the facility namely: Solar Hybrid Mini Grids under the minimum subsidy tender (MST), which will cost US $70m; Energy-Efficient Appliances for Productive Use, US $20m; phase three of the Energising Education Programme, US $100m, and technical assistance and capacity building which is US $10m.

Nigeria is the largest economy in sub-Saharan Africa, but limitations in the power sector constrain growth. Nigeria is endowed with large oil, gas, hydro and solar resource, and it already has the potential to generate 12,522 MW of electric power from existing plants, but most days is only able to generate around 4,000 MW, which is insufficient. The country has privatized its distribution companies, so there is a wide range of tariffs.

LONDON, March 26 (Reuters) - The African Development Bank (AfDB) sold a record $3 billion debt issue on Thursday, joining the fold of multilateral and public lenders ramping up efforts to raise financing to help combat the fallout from the coronavirus outbreak.

The spread of the coronavirus - which has killed more than 22,000 people worldwide and wreaked havoc in economies and markets around the globe - has been slower across Africa than in Asia or Europe.

However, more than 40 nations on the continent have now reported a total of 2,850 cases with 73 death, according to a Reuters tally, amid rising concerns over what it could mean for a continent where healthcare systems are often fragile and overburdened already.

The three-year bond, the AfdB's biggest dollar issue to date, aims to provide "support and financing to countries and businesses fighting against COVID-19", a note from a lead manager of the issue said.

"Through this Fight COVID-19 Social Bond, investors will be able to support African communities to help curb the spread of the virus and overcome the many challenges caused by the outbreak," the statement said.

Order books grew to more than $4.6 billion, according to lead managers. The bond will pay a coupon of 0.75%.

"It was well received," said one lead manager on the deal, adding the funds being earmarked to fight the fallout from the health crisis would have motivated some investors, though it was broadly the bank's usual customers who bought the bond.

"These issuers... generally have very good social purpose so that's mainly the key driver I would say," the banker added.

The development bank, which is AAA-rated, is just one of a number of public issuers selling fresh debt linked to efforts to combat the virus spread.

The International Finance Corp sold a $1 billion dollar-denominated social bond as part of the World Bank Group's $12 billion coronavirus financing package.

Also on Thursday, the Inter-American Development Bank (IADB) launched on a five-year dollar-denominated bond expected to price in the days to come. It is part of the IADB's $2 billion programme aimed at helping "countries throughout Latin America and the Caribbean cope with challenges posed by the pandemic", according to another term sheet.