November 2019 / South Africa

The city being built near the natural gas projects in Cabo Delgado in the north of Mozambique will cost at least €1.5 billion and have 150,000 inhabitants, the entity in charge of the project said yesterday. The estimated 150,000 residents of the city include the 15,000 people currently living on the Afungi peninsula in Cabo Delgado, Lorenzo Monti, a representative of Italian company Renco Energy and project director of the future ‘gas city’ says. The city master plan commissioned by the National Hydrocarbon Company (ENH), the state partner in the megaprojects, was presented at the 6th Mozambique Gas Summit in Maputo yesterday. The plan foresees 1,200 hectares (ha) of residential areas, a 3,800 ha industrial area, 2,300 ha for agriculture, 8,000 ha for green areas and 214 ha for tourist infrastructure, making 15,500 hectares in total. The city will be sited close to the natural gas liquefaction units driving the development of the entire zone and based on investments worth around US$50 billion (€45.4 billion) by oil companies Total, Exxon Mobil. and Eni, and which should place Mozambique among the world’s leading producers of liquefied natural gas (LNG). Construction work is expected to start before gas extraction and liquefaction begin in 2025 and to progress gradually through to 2050, Monti said. The city will have 50 to 60 kilometres of electricity distribution network and 300 to 400 kilometres of water mains, along with a purification plant and pumping station. The water infrastructure will have the capacity to supply 25,000 to 30,000 cubic meters per day. The construction of a wastewater collection network and a solid waste separation, recycling and recovery facility is also planned. Public buildings housing health, education, security and other services, as well as dozens of kilometres of road network, complete the project. The industrial zone will be divided into four areas: one for the operation of a power plant, another for a petrochemical plant that will produce fuel, one for fertilisers and one for suppliers’ warehouses. The Gas City Master Plan also foresees a 214 ha tourist area, with a maximum capacity of 15 hotel units and 500 square metres of apartments. “The Gas City Master Plan is guided by five values: economic and social development; attraction of national and international investors; respect for the environment, nature and communities; development of infrastructure, industries and tertiary activities; and the establishment of a model of sustainable development,” the project director said.

Nigeria Sovereign Investment Authority (NSIA), the sovereign wealth fund of Africa's largest economy, is looking for co-investors to develop two gas industrialisation projects worth more than $1 billion (Dh3.67bn), as it continues to broaden its portfolio of investments. NSIA plans to develop a basic chemicals platform with a project value in excess of $1bn that will produce ammonia and fertilisers in Nigeria. The second one, a project to convert flare gas into LPG, could cost more than $100 million, Uche Orji, the chief executive of NSIA, who is in Abu Dhabi attending a two-day Africa Investment Summit hosted by the Abu Dhabi Investment Authority, told The National. “We will be looking hopefully to develop [the projects] with sovereign wealth funds and other co-investors,” he said. The talks are at early stages, he said and did not name any potential partners. Nigeria, Opec’s biggest crude producer in Africa, relies heavily on the oil and gas sector, which accounts for about 20 per cent of its gross domestic product, and 85 per cent of total exports, according to Opec data. The country expects investments worth $48bn between 2018 and 2025 in the sector, Maikanti Baru, former managing director of Nigerian National Petroleum Corporation (NNPC) said in July. Mele Kyari, who has replaced Mr Baru as the head of NNPC, said that state-owned energy companies Saudi Aramco and Abu Dhabi National Oil Company are also considering investing in Nigeria's energy sector. “We are open to all partners, all like-minded partners. We have no restrictions, we have ongoing discussions with so many people,” Mr Orji said of the potential deals with long-term investors across sectors of Nigerian economy. “We have health care, we have infrastructure [projects], it really depends on what the interest of our partners is.” Additional equity from the government, Mr Orji said, will help NSIA to broaden its investment base. The fund's current focus remains on achieving growth through joint investments. “I’m expecting more from the government but a lot of it would depend on the oil price movement,” he said. “We are very hopeful that we will get some funds,” he said. The current price level of $62 per barrel for Brent crude is still above “our benchmark rate”, which is $57 per barrel, he saoi. NSIA invests through its three main funds: the Stabilisation Fund, Future Generations Fund and Nigeria Infrastructure Fund, which account for 20, 30 and 50 per cent of its investments, respectively. NSIA not only manages its own funds, but it also those on behalf of the Nigerian government and its total assets under management are between $2.5bn to $3bn. Over the years, NSIA has increased its focus on domestic infrastructure projects and it is investing in three major transport infrastructure schemes – the Abuja-Kano highway, Second Niger bridge and the Lagos-Ibadan road projects. “These projects are quite significant altogether. When they are done, they would be around roughly $2bn [in value]”, he said. The projects are being financed through the funds provided by the government and NSIA’s own equity and it will look to raise $500m in external funding from the market next year, Mr Orji said. “We are appointing advisers next year to commence the capital raising process,” he said without specifying the timing of the deal. Development of power, agriculture and the healthcare sectors is among the top priorities for NSIA, and the authority is looking to join hands with sovereign wealth funds from the Middle East and beyond for co-investments in these sectors. “Less than 20 per cent of the Nigeria’s arable land is cultivated for agriculture so that’s an opportunity right there. We are talking about a large quantum of land here,” he said. Within the healthcare sector, it has already finished two projects this year and is on track to finish another in the first quarter of 2020. The country is looking to launch another two next year out of the active pipeline of 12 projects, he said

ETHIOPIA – International Fund for Agricultural Development (IFAD) and Ethiopia have signed an agreement to fund the Lowlands Livelihood Resilience Project by injecting US$451m funded through a combination of debt and grant. The financing agreement was signed by Gilbert F. Houngbo, President of the International Fund for Agricultural Development, and Zenebu Tadesse Woldetsadik, Ambassador, Permanent Representative of the Federal Democratic Republic of Ethiopia to the United Nations Food and Agriculture Agencies in Rome. The funding includes a US$90 million loan from IFAD and $350 million in co-financing from the International Development Association (80 per cent loan and 20 per cent grant) and $11million from the beneficiaries themselves. The Lowlands Livelihood Resilience Project is aimed to increase resilience to climate shocks in the communities at the lowland areas of Ethiopia who are dependant on rain fed agriculture and pastoralism thus highly vulnerable to droughts, desertification and floods. The project is primarily designed to help achieve Sustainable Development Goals 1 and 2 (eradicating poverty and hunger) will install small-scale irrigation technology to reduce dependence on erratic rains. It will also help smallholder farmers to invest in research systems for faster adaptation to climate change and develop an innovative value chain approach to leverage private investment, productivity and win-win commercial linkages between local businesses. It also aims to improve nutrition by providing education on food handling and food preservation and the production of more nutritious and diverse crops with access to bio-fortified seeds and technical assistance, including on post-harvest handling. By strengthening rangeland and natural resources management, and improve the delivery of basic social services the project will also help mitigate conflicts over scarce resources in fragile pastoral and agro-pastoral ecosystems. The project is set to cover the pastoral and agro-pastoral areas in the Afar, Benishangul-Gumuz, Gambela, Oromia, Somali and Southern Nations, Nationalities and Peoples’ regions, reports APO-Group. Since 1980, IFAD has invested $755.5 million in 19 rural development programmes and projects worth US$ 1.8 billion in Ethiopia. These have directly benefited around 11.5 million rural households.

Johnson & Johnson International Pharmaceutical Industries injected LE 125 million in new investments in Egypt during 2019 to increase its investments to LE 2.3 billion, Minister of Trade and Industry Amr Nassar said Tuesday. Nassar said this step reflects the international business circles and multinational companies' interest to work in the Egyptian market as one of the most important markets in the Middle East and Africa. He expressed the ministry’s keenness to promote the pharmaceutical industry as one of the strategic industries in the national economy in order to meet the needs of the local market and export to regional and international markets, according to Minister Nassar. Nassar added in a statement that the Egyptian pharmaceutical products enjoy high quality and great competitiveness in the African market. This came during a meeting with Ziger Verkotern, vice president of Johnson & Johnson International Pharmaceutical Industries for Europe, Middle East and Africa and Ahmed Khalil, director of Government Affairs and Policy for North Africa. Nassar referred to the great investment opportunities in the Egyptian market in the field of producing medicine and health care products, which can be exported to the markets of neighboring countries and the African continent. The minister pointed out the possibility of establishing projects for Johnson & Johnson International in cooperation with the Egyptian pharmaceutical sector in the African continent in light of the ministry's keenness to launch industries in a number of East and West African countries with Egyptian expertise and inputs. According to the minister, Egypt's advantageous position can enable the company to access regional and international markets. The company can also exploit Egyptian ports on the Red Sea and the Mediterranean to reach countries of East Africa, Southeast Asia and Europe. He stressed that Egypt has a huge industrial base in the pharmaceutical sector that qualifies it to lead the pharmaceutical industry in the region.

The UAE and Egypt will establish a $20 billion (Dh73bn) investment fund, Sheikh Mohamed bin Zayed announced on Thursday. The Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces launched the fund, along with Egyptian president Abdel Fattah El Sisi, during Mr El Sisi's two-day visit to the Emirates. The joint investment fund will implement social and economic projects for both countries. "Together with my brother, President Abdel Fattah El Sisi we launched a joint strategic investment platform between the UAE and Egypt worth $20 billion to implement vital economic and social projects for our brotherly countries," Sheikh Mohamed bin Zayed said on Twitter The Crown Prince also bestowed the Order of Zayed, the UAE's highest civilian honour, on Mr El Sisi at Qasr Al Watan. The Egyptian president now joins other global leaders such as Russia's Vladimir Putin and China's Xi Jinping in having been afforded this honour. Other deals struck between both countries included measures to prevent tax evasion, insurance issues and employment. It was a day of pomp and ceremony in Abu Dhabi. Mr El Sisi arrived at the palace just after midday, flanked by a guard of honour as the Al Fursan aerobatic team soared overhead. Egyptian and UAE flags fluttered in the breeze. It was Mr El Sisi’s second visit in less than two years and underlines the strong relationship between the two countries. Sheikh Mohamed welcomed Mr El Sisi to his “second home”. "The relations between the UAE and Egypt are historical and strategic and are based on trust and understanding,” said Sheikh Mohamed, noting that the late President Sheikh Zayed considered Egypt as the heart of the Arab region. "Egypt's security is as important as the UAE's security, and its progress, development and stability are important to the UAE and all Arab countries. Confronting the challenges and risks facing the Arab region requires intensifying the ongoing consultations between our countries and joint Arab action," he said.   Mr El Sisi was accompanied by a high-level delegation including Minister of Foreign Affairs, Sameh Shoukry, Maj Gen Abbas Kamel, chief of the Egyptian General Intelligence; and Sharif Al Badawi, Egyptian Ambassador to UAE. Ties between both countries are deep and historic. Sheikh Zayed met then Egyptian leader Anwar Sadat in Cairo in 1970, and again in 1971 when the UAE was established. Sheikh Zayed supported Egypt in the 1967 war with Israel and in 1973. Formal support from the Abu Dhabi Fund for Development began in 1974 and by 2009 Cairo had ranked the UAE as the leading foreign government investing in Egypt. About 10 years later, the UAE and Egypt established a strategic partnership to boost the performance of the Egyptian administration. Since Hosni Mubarak stepped down amid huge protests in 2011 to Mr El Sisi taking power in 2014, the UAE has consistently supported Egypt. Mr Al Badawi praised the UAE for standing by Egypt during the past few years. As many as 400,000 Egyptians live in the UAE, with many playing a key role in helping to build the country. Egyptian City planner Dr Abdulrahman Maklouf, for example, helped to draw up an early master plan for Abu Dhabi. Since those days, countless Egyptians have lived and worked in the UAE in sectors such as education, engineering and hospitality. Both leaders also discussed the regional situation. Sheikh Mohamed said the two countries are fighting against extremism, terrorism and attempts to threaten peace and security. "Egypt is a key country in the Arab region and is one of the cornerstones of Arab security," said Sheikh Mohamed. Mr El Sisi, meanwhile, expressed his happiness at visiting the UAE and stressed that a special relationship existed between the UAE and Egypt. He left the UAE on Thursday evening.

Government has secured $250 million from the World Bank as initial capitalization to kick-start the operations of the National Development Bank (NDB) in 2020. Presenting the 2020 Budget in parliament, Finance Minister Ken Ofori-Atta said, “In view of the high level of interest generated, other Donors such as DFID, KFW, AfDB are expected to provide additional capitalization for the Bank once it becomes operational in 2020.” According to Mr Ofori-Atta, the government has completed a feasibility study for the establishment of National Development Bank envisioned to refinance credit to industry and agriculture as a wholesale bank; and also provide guarantee instruments to encourage universal banks to lend to these specific sectors of the economy. He said, “The National Development Bank (NDB) will be an independent institution with a strong corporate governance framework, and would be globally rated to enable it to leverage foreign private capital for industrial and agriculture development in the country.” According to Mr Ofori-Atta, “It is expected that the National Development Bank will provide cheaper and long term funding for the growth and expansion of key companies operating in the agriculture and industry sectors.” He said the development bank will also lend through specialized banks to key anchor industries at the Metropolitan, Metropolis and District Assemblies level to support the governments IDIF initiative. Mr Ofori-Atta in the 2019 Budget announced that they have made some progress in establishing the National Development Bank, which is expected to focus on industry and agriculture.

Dubai’s DP World has signed a preliminary agreement with the Nara Namib Free Economic Industrial Zone to develop a dedicated business park in the Namibian port town of Walvis Bay. The park will be a ‘free economic zone’ for industry and logistics and initially cover an area of 50 hectares, according to a statement on Dubai’s government media office website on Tuesday. The park could eventually be spread across 1,500 hectares, it said. A free economic zone is often a dedicated area that has different laws or rules, such as fewer or no taxes, designed to attract investment. DP World and Nara Namib aim to reach a final agreement in the second quarter of 2020, the statement said.

US $2bn is set to be invested in construction of biomass power plants in Egypt. The government made the announcement and said that each of the governorates that will house a power plant will have to buy back US $6.65 per kWh and the remaining US $2.23 will be paid by the environmental agencies under the jurisdiction of the Ministry of Environment. The land that will house the plant will be offered by the host governorate under a usufruct regime ( The right granted to an entity to use property and enjoy the income it provides, without being the owner). In addition, each governorate that will house a factory will have to provide the waste necessary for its operation free of charge. These infrastructures upon completion will make it possible to transform 600 tonnes of waste into energy every day. The repurchase price per kWh of the energy to be produced is estimated at US $8 over a 45-year period, part of which will therefore be subsidised by the State. A number of both local and foreign investors have submitted their applications towards the development. Among them, the Egyptian Company for Solid Waste Recycling, Empower Energy, Global Knowledge Company (GKC), China Power International Development, Shanghai Electric.

Energy mix and trend in Egypt

The current energy mix and trend in Egypt is similar to that of other emerging economies, where the share of renewable energy in power generation is declining despite the increase in renewable energy diffusion and investments overtime, due to higher growth in overall energy demand.

Current power generation in Egypt is dominated by natural gas, which contributes more than three quarters of total generation. The power sector consumes more than 50% of all natural gas, with the share of renewable energy declining from 13% in 2010 to 10% in 2014.

An agreement was recently signed between the government of Ivory Coast and the International Finance Corporation (IFC), a subsidiary of the World Bank in charge of private sector financing. It concerns the implementation of two solar photovoltaic projects.

Accra — Dangote Industries will invest in a $2bn (R29.5bn) phosphate project in Togo, positioning itself to become a main supplier of fertiliser in West Africa. The company controlled by Nigerian billionaire Aliko Dangote will mine an estimated two-billion tonnes of phosphate in nearby Togo for processing as much as one-million tonnes of fertiliser a year at a new complex in Lagos, according to a joint statement by the company and the Togolese presidency. “Under the agreement, Togo will provide access to phosphate resources and the Dangote Group will provide access to ammonia and to the Nigerian market,” the parties said in the statement. Ammonia is a key ingredient in the production of phosphate fertiliser. Nigeria accounts for as much as 50% of harvested land in West Africa, making it a top market for fertiliser consumption growth, according to London-based commodities consultancy CRU.

Visa is to spend hundreds of millions of dollars to acquire a stake in Interswitch, an African payments group, in a deal that will see it becoming the continent's latest technology 'unicorn'. Sky News has learnt that Visa and Interswitch are in advanced talks about a transaction that could be announced as soon as this week. Sources said on Sunday that the US-based multinational would invest $200m in Interswitch in return for a 20% stake. The deal will see Visa becoming a cornerstone investor in the Nigerian-headquartered company ahead of a prospective initial public offering in London during the first half of 2020. Interswitch is one of the largest Africa-focused electronic payments and infrastructure companies, with point-of-sale terminals, online consumer payment platforms and its own card, Verve. The latter is the biggest domestic debit card scheme in Africa, with more than 19 million cards active on its network. An investment by Visa will facilitate the formation of a strategic partnership to target the fast-growing African digital payment market. It will come months after its global rival, Mastercard, invested $300m in Dubai-based Network International ahead of its stock market debut in London. Network International, which is the largest payment processor in Africa and the Middle East, has since seen its shares perform strongly, bucking the trend of a stagnant environment for London IPOs. The rush to build stakes in African businesses by Visa and Mastercard is being driven by a desire to take advantage of established platforms in markets that are both fast-growing and under-penetrated. Unlike many fintech groups, Interswitch is both profitable and generating significant levels of cash. The two dozen countries it serves include some of the most populous in the world, including Nigeria, which is home to nearly 200 million people. Founded in 2002 by Mitchell Elegbe, an entrepreneur, Interswitch appointed Sir Kenneth Olisa, a prominent corporate governance stalwart, as its chairman in 2017. Sir Kenneth, a former deputy chair of the Institute of Directors, once memorably described the Kazakh mining company ENRC - on whose board he had served as "more Soviet than City". An eventual IPO for Interswitch would allow the company's majority shareholder, Helios Investment Partners, to begin selling down its stake if it chooses to do so. Helios has already floated a separate namesake business, Helios Towers, in London in recent weeks. JP Morgan is leading the syndicate of investment bankers which have been hired to work on Interswitch's eventual flotation. A previous plan to take Interswitch public stalled in 2016 amid a contraction in Nigeria's economy. Interswitch declined to comment, while Visa could not be reached for comment.

South African mobile operator MTN, together with Huawei have launched their C-band 5G trial on Tuesday, 12 November 2019, as part of the operator’s network evolution plan towards 5G.