AFRICAN ENERGY

OIL GAS POWER POLICY & FINANCE

www.africa-energy.com Issue 247 31 January 2013

Pipeline attacks add to fears of protracted regional

conflict despite end to Algerian hostage crisis
A second attack in the Algerian hydrocarbons fortress and an emerging narrative in which western governments
see an arc of instability spanning the Sahara/Sahel region means IOCs must reassess their attitudes to regional
risk following the traumatic In Amnas gas plant siege, write Jon Marks and John Hamilton

T
he launching of homemade rockets at a pipeline running
north from the Algerian gas hub of Hassi RMel late on
27 January was claimed by Al-Qaeda in the Islamic
Maghreb (AQIM). The attack lacked the detailed planning
and shocking loss of life of the 16-19 January incident at the
BP/Statoil/Sonatrach gas production facility at In Amnas,
which left 37 foreign workers dead and five unaccounted for.
But claimed by Algerian Islamist cell leader and desert racketeer
Mokhtar Belmokhtar, it was just as worrying for international
oil companies (IOCs), the Algiers authorities, European energy
strategists and governments which have been struggling to make
sense of a conflict in the Sahara/Sahel region that seems now to
have spread further north into the Algerian hydrocarbons
fortress.
The 27 January attack was more reminiscent of Algerias low-
intensity war with radical Islamists in recent years focused on
the Sahara and mountainous parts of Kabylie, a redoubt for the
ultra-radical GSPC group which last decade morphed into
AQIM than the well-orchestrated In Amnas attack, which
was carried out by a multinational jihadist team. The pipeline
attackers melted into the night as army units searched the An
Chikh region, on the southern edge of Kabylie.
But the An Chikh attack underlined the message of In Amnas:
that jihadists had burst the bubble of impregnability that
surrounded the hydrocarbons fortress established in the blood-
soaked 1990s. With it, established perceptions of IOC security,
Algerias political and energy relationships, and wider operations
in a region stretching from Mauritania to Somalia have come
under intense scrutiny (see Testing questions for IOCs and
governments after bloody end to Algerian hostage crisis, posted on 22
January at www.africa-energy.com).
CONTINUED ON PAGE 3

LNG plans Azeri tie-up Canada gets tough on bribery

Anadarko has awarded
multiple FEED contracts for
the onshore and offshore
elements of its planned LNG
plant in northern
Mozambique. But, as Rio
Tinto found with its recent
coal infrastructure woes,
development may not be plain
sailing. Anadarko and Eni have
agreed to co-ordinate
development, and once all the
designs and estimated costs are
submitted, an LNG contractor
and an offshore contractor will
be selected, with the target of
starting production in 2018.
SEE PAGE 17
Afren affiliate Gasol has agreed
a strategic alliance with
Azerbaijans Socar Trading for
its proposed LNG import
project in Benin. Socar will
supply LNG and help provide
a storage vessel for the project,
which aims to supply gas-
hungry clients in Benin, Togo
and Ghana, replacing gas flows
promised, but not delivered, by
the West African Gas Pipeline.
In the longer term, Gasol
hopes to supply associated gas
from Afrens Nigerian oilfields.
SEE PAGE 18
A bribery conviction against
Griffiths Energy International
has been welcomed as a sign
that Canada is acting to tackle
its reputation for being less tough
on corruption than the US or UK,
even though the company
uncovered the payment itself,
and reported it to the authorities.
Griffiths has been fined a record
C$10.35m over a $2m payment
by late founder Brad Griffiths to
a company owned by the wife of
the Chadian ambassador to the
US and Canada.
There have long been doubts
about governance at some of the
many resource companies listed
on the Toronto Stock Exchange
and its junior market, the TSX
Venture Exchange, and in 2011,
the OECD and Transparency
International criticised Canada
for doing too little to enforce the
1999 Corruption of Foreign Public
Officials Act. Since then,
Canadian police have stepped up
their efforts, prosecuting Niko
Resources in 2011 over
payments in Bangladesh, and
now investigating SNC-Lavalin
over its relations with Saadi
Qadhafi.
Griffiths new management,
meanwhile, stress that the
matter is now closed and they
are concentrating on developing
their Chad operation.
FOR MORE, SEE PAGE 19

ISSN 1463-1849 Cross-border Information

Contents

FOCUS

AFRICAN ALGERIA: Pipeline attack fuels fears of protracted crisis

REGION: Canada gets tough on bribery
ALGERIA: Parliament approves new hydrocarbons law
1
1
3

ENERGY MAP: Production, pipelines and January incidents

ALGERIA: The In Amnas attack
4
6
OIL GAS POWER POLICY & FINANCE LIBYA: New regional security threat 7
POWER
African Energy
Issue 247 31 January 2013 MOROCCO: Taqa finalises Jorf Lasfar financing 8
GHANA: Takoradi II reaches financial close 8
Sales and Service BOTSWANA: BPC and Eskom agree new deal 8
ZAMBIA: First Quantum plans transmission line 9
Direct: +44 (0) 1424 721 667
Fax: +44 (0) 1424 721 721 SOUTH AFRICA: REIPP developments 9
Email: info@africa-energy.com POINTERS: Cte dIvoire DR Congo, Ethiopia 10
POINTERS: Morocco, Tunisia, Uganda 10
Director Nick Carn
nick@cbi-publishing.com POWER UPDATE: INDIAN OCEAN ISLANDS
Manager Helen Ogden OVERVIEW: Diversification is key 11
helen@cbi-publishing.com UPDATE TABLE: Planned and operating projects 11
MAP: Power generation in the Indian Ocean islands 13

Editor UPSTREAM OIL AND GAS

Thalia Griffiths MOROCCO: Chevron agreements, Plains Exploration stake 15
thalia@africa-energy.com GHANA: Eni appraises Sankofa discovery 15
REGION: Elenilto in West Africa push 15
Editorial Director
Jon Marks NAMIBIA: Galp farm-in approval paves way for drilling 16
jon@africa-energy.com SOUTH AFRICA: Thombo launches seismic survey 16
POINTERS: Gabon, Wilton Resources 16
Cartographer
SOUTH AFRICA: Kinetiko widens CBM area 17
David Burles
REGION: Aminex loses chief executive 17
Contributing Editors
Eleanor Gillespie, Kevin Godier, John Hamilton, DOWNSTREAM HYDROCARBONS AND MARKETS
Oualid Khelifi, Leonard Lawal (Lagos), Dan Marks, MOZAMBIQUE: Anadarko awards LNG FEED contracts 17
David Slater, Franois Misser (Brussels) BENIN/REGION: Gasol links with Azeris for LNG supply 18
Production POINTERS: Algeria, Angola, Cte dIvoire 18
Shirley Giles FINANCE AND POLICY
CHAD: Griffiths Energy guilty of bribery 19
2013 Cross-border Information. All rights reserved. CHAD: Tyab brothers influential role 20
NIGERIA: IFC issues naira bond 20
Single subscriptions of African Energy are available in Internet format
including online and emailed content. Data and information published POINTERS: AfDB, Sudan, Madagascar, Tanzania 21
in African Energy is provided to Cross-border Information (CbI) by its
DIARY
staff and network of correspondents through extensive surveys of
sources and published with the intention of being accurate. CbI cannot EVENTS: Whats on around the region 22
insure against or be held responsible for inaccuracies and assumes no AFRICAN ENERGY VIEW
liability for any loss whatsoever arising from use of such data. No por-
tion of this publication may be photocopied, reproduced, retransmitted, MOROCCO: Pushing security from renewables 23
put into a computer system or otherwise redistributed without prior au-
thorisation from Cross-border Information.
Contact subscriptions@africa-energy.com for details of multi-user
subscriptions.

2 AFRICAN ENERGY ISSUE 247 31 JANUARY 2013


Algerian parliament approves new hydrocarbons law
Algerias long-awaited hydrocarbons law revisions were finally
approved by parliament on 21 January, five months after the law was
adopted by the government and Council of Ministers. Some
international oil executives gave them a cautious welcome, while others
said the new terms were too little too late. The revised text was passed
by an overwhelming majority of deputies, who voted to amend 58
articles and introduce nine new ones to Law 05-07. The new law was
promoted to much acclaim in 2005 by then energy and mines minister
Chakib Khelil, but was subsequently revised under pressure from
resource nationalist opinion in 2007.
International oil companies (IOCs) largely boycotted the last three
licensing rounds and, aware of the need to make the investment
framework more attractive, the energy industry has looked to revised
fiscal terms that might revive interest. Under the new law, the
methodology for determining the taxe sur le revenu ptrolier (tax on
revenues) is to be based on profitability rather than turnover.
Also likely to go down well with investors is the introduction of the
impt complmentaire sur le rsultat (ICR), a tax formula believed more
rational and less punitive than the controversial old taxe sur les profits
exceptionnels, which scared away big players and inflicted multi-billion
dollar losses on state company Sonatrach as disputes with
international partners were settled. ICR rates will start at 19%, but
could reach 80% depending on production volumes and profitability.
Exactly how the ICR will be calculated has yet to be published, and
there are concerns that the 2013 fiscal incentives exclude deposits that
are currently being exploited. It is not explained how this would work in
existing blocks that are both producing and under development for
example, by drilling into new and complex structures, or applying
advanced recovery techniques.
The state remains dominant
The new law gives Algiers the means to tighten scrutiny over the sector
by introducing provisions by which all IOCs become fiscal subjects when
they operate in Algeria, obliging them to register for local taxation and not
operate through offshore subsidiaries. Energy and mines minister Youcef
Yousfi said this would overcome a legal loophole by which Sonatrach
alone has been subjected to fiscal control. According to tax revenues
department director-general Abderrahmane Raouia, the authorities are
Fears of protracted regional conflict
CONTINUED FROM PAGE
An informative dissection of the workings and strategy of
AQIM published in late January by the Quilliam Foundation, a
think-tank monitoring radical Islamist activity, titled Its a
Salafi-Jihadist Insurgency, Stupid!, argues that the In Amnas
attack shows the difference in AQIMs tactics to some of its
affiliate groups. The briefings author, Quilliam president
Noman Benotman, told African Energy he believed the
hydrocarbons sector is now the main target in Algeria.
As the In Amnas siege closed on 20 January, the Algerian
security services could claim they had achieved their main aim,
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Focus
not concerned about false or misleading financial statements by energy
partners, but about potential errors in calculations.
Some elements of the revised law are a reaffirmation of the
governments nationalist economic policies. Among notable measures,
it gives Sonatrach exclusive ownership of pipelines and hydrocarbons
transportation activities.
With domestic gas consumption rising fast, potentially thorny issues are
raised by an article intended to ensure that sufficient supplies are
available for local consumers by forcing partners to concede some of
their production should Sonatrach and its affiliates fall short of
satisfying local demand. According to one regional energy expert,
Algeria seems to be following down the road taken by Egypt, whose
domestic economics have led it to plan for imports (AE 246/1).
Unconventional incentives
As expected, incentives to promote exploration for unconventional
resources which has attracted considerable interest from companies
including Eni and Royal Dutch Shell are written into the revised
hydrocarbons law. For the first time, legislators have specifically
addressed shale gas and other unconventional resources, introducing
tax incentives to encourage activities related to geologically complex
perimeters. Following debate in the APN and concerns from
environmental groups, terms on environmental safeguards for fracking
were written into the final version. Small deposits are specifically
targeted, as well as areas that have been underexplored and/or lack
infrastructure. Also as expected, fiscal enticements have been included
to encourage offshore E&P.
Much depends on the details of fiscal terms still to be published, and
how the new law is implemented and interpreted. Some local critics
voiced dismay at the timing of the vote, which coincided with the In
Amnas hostage crisis. Although the dates for parliamentary debate
were scheduled in early January, independent commentators said the
vote should have been postponed. Others argued that legislators
should have waited to consider whether the rising security threat in the
south and around energy sites could also be addressed through the law,
but this was soundly rejected by Yousfi, who argued that important
legislation should not be influenced by immediate events.
OUALID KHELIFI
of eliminating the Islamist militants who had invaded the plant.
This sent out a message that deals wont be done by the
1
military/security establishment (see Cross-border Informations
Algerian Hydrocarbons risk report posted on 18 January 2013 at
www.africa-energy.com).
One consequence will be that security levels are raised,
although this will mainly be left to the Algerians to achieve, as
the authorities have reiterated their public disdain for western
security companies and determination that boots on the
ground remain Algerian. Energy and mines minister Youcef
Yousfi was quick to say there would be no opening up to
western security companies, which are present in a discreet
advisory role to IOCs, but whose operations are highly
3
4
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African Energy 2013
Algeria: Main production centres, pipelines & January 2013 incidents

(www.africa-energy.com)

AFRICAN ENERGY ISSUE 247 31 JANUARY 2013


constrained. While it insists its security forces are fit for purpose
defending foreign workers and investments, Algiers is looking
for increased security co-operation from western allies. This is
a long-standing theme of Algerian securocrats, which was
expected to be discussed on 30 January when Prime Minister
David Cameron paid a visit to Algiers, the first by a UK
premier since independence.
Duty of care
The loss of life at In Amnas and wider concerns about
deteriorating Sahara/Sahel risk pose critical questions for IOCs
about their security and duty of care to employees. Strategic
analysts are rethinking approaches to what is being called the
arc of instability, a freshly minted term for the region
stretching from Mauritania to Somalia that now seems to
include Algeria and Libya.
One supermajors political risk specialist expressed a widespread
view in industry and government when he told African Energy
he was alarmed by the Algerian security forces priority of
eliminating terrorists, rather than allowing a protracted hostage
standoff that might save workers lives. If an IOC couldnt
count on a host government to give its employees safety the
highest priority, it would have to reassess its presence, he argued.
This is a major issue that will be debated across the industry.
Another industry source with operations in Algeria described
the In Amnas attack as a game changer. He said:We have
always accepted a degree of risk working in Algeria a security
risk along with the commercial risk [which] we have assessed
and mitigated A large part of that mitigation has been
around the military and Sonatrachs involvement with the
military.
In question is the ability of the military and the powerful
Dpartement du Renseignment et de la Scurit (DRS) military
intelligence service to guarantee security and maintain their
decades-long hegemony in Algerias southern hinterland. A
number of analysts have argued that the attack and its brutal
resolution have damaged the authority of DRS chief Major
General Mohammed Tewfik Medienne and his deputy
General Bashir Tartag, who commanded the In Amnas
operation. There is speculation about another behind-the-
scenes power struggle in Algiers, ahead of Mediennes
long-anticipated retirement.
IOCs in general were under the impression that we were
working in a very well-controlled environment, said the
industry source. But this confidence has evaporated:We just
saw the level of risk dramatically increase and we have reached
a point where we have minimal manning in country we
believe we are servicing our contract. Now we have to
understand what we have to do to bring our own risk level
down to an acceptable point.
Another executive observed that his companys site used the
same security protocol as at In Amnas, which was very
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Focus
worrying. But other IOC sources were more sanguine. One
of the many executives who spoke to African Energy in late
January suggested that the attack did not [represent] a sea
change it is par for the course in Algeria and Libya. We have
always been super-careful. There is no massive change as these
things are already implemented The Algerians know what
they are doing. But even this source called In Amnas a
wake-up call that required a re-evaluation of all the security
measures that we take.
IOCs are somewhat powerless. We have our security guys out
there assisting, but the onus is on Sonatrach, the military and
the gendarmerie to manage the risk and give us the comfort
that they are enough of a deterrent for something like this not
to happen again. They need to be much more proactive, said
one source. The army units assigned to facilities were poorly
led, poorly trained conscripts. Local staff were not even
obliged to wear identity badges. Meanwhile, the DRS has
been playing with fire, he said, alluding to claims the security
services had infiltrated groups such as Belmokhtars, but had
ultimately failed to prevent the attack.
Added to this is the perception that, even with a revised
hydrocarbons law (see page 3),Algeria is not notably welcoming
to IOC investment. A few IOCs that were winding down their
Algerian commitments anyway may pull out entirely after In
Amnas. Those most affected such as Norways Statoil have
entered a period of reflection, while urgently reassessing more
short-term security priorities. But others will stay, arguing that
the countrys subsurface potential outweighs above-ground
risks.
Early on 20 January, UK supermajor BP completed the
precautionary evacuation of more than 35 non-essential staff
from In Salah, Hassi Messaoud and other locations, saying it
was keeping the security situation across the region under
close review. By 19 January, Statoil had brought 51 staff
members out of Algeria. Spains Cepsa and US-based Hess
have also withdrawn staff.
Frances GDF Suez evacuated 40 foreign workers involved in
the $1.5bn Touat gas project in the Adrar region of south-west
Algeria, several hundred kilometres from In Amnas. Analysts
suggest that, if violence in Algeria is a response to President
Francois Hollandes intervention in Mali, then French
interests could become a particular target. Michelin is among
non-oil sector companies that have temporarily withdrawn
staff.
In the arc of instability
Western governments are frantically deploying human and
material resources to understand and cope with this challenge,
led by Hollandes military offensive in Mali (AE 246/27). The
UK is looking to provide thought leadership, but Camerons
government has courted controversy by committing some 350
military personnel to operations in Mali and its neighbours in
5
Focus

an operation that a number of Whitehall sources told African

Energy was being driven by Camerons office.
The US initially offered little more than moral support for the
French intervention, but is now talking about siting drone
aircraft in the region possibly in Niger to pursue AQIM as
it has pursued jihadists in Afghanistan, Pakistan and Yemen.
Outgoing secretary of state Hillary Clinton was quick to
promote moves that broaden and deepen our counter-terror
co-operation going forward with Algeria, and pointed to the
flow of arms from, and instability in, Libya as a significant
element.
Despite the robust performance of the Algerian army and
gendarmerie, partner governments are wondering just how
sound Algiers is as a partner. Although Cameron and other
leaders have decided to align their policy with President
Abdelaziz Bouteflika, questions are being asked about
Algerias command and compliance structure.
Bouteflika was apparently absent as In Amnas crisis unfolded.
African Energy understands he had gone to Geneva for a regular
medical check-up. Other senior officials, including prime
minister Abdelmalek Sellal and foreign minister Mourad
Medelci, eventually responded to calls, but the crisis was being
handled in other power centres, dominated by the
military/security authorities. Adding to the confusion, is
speculation about power struggles as Algiers confronts
generational change, with Medienne and other key decision-
makers, as well as Bouteflika, approaching retirement.
Old concerns surrounding the dealings of Algerian jihadists,
led by Belmokhtar, and elements of the security services are
fuelling the rumour mill. It is widely believed that Belmokhtar
who seems to have had dealings with most players active in
the Saharan underworld has, at some time, been used as a
DRS asset.
The In Amnas attack
The attack on the BP/Statoil/Sonatrach associations gas production
facility was carried out by Al-Mouakioune Bi Dam (Those who Sign
in Blood), led by Sahel-based jihadist Abdelhakim Al-Nigeri, whose
commander (not present) was the veteran Algerian-born Islamist
guerrilla leader, kidnapper and trafficker Mokhtar Belmokhtar.
More than 830 people were working at the In Amnas complex on 16
January; most were liberated during the militarys first assault the
following day. A total of 685 Algerian and 107 foreign hostages were
freed by 19 January after what Statoil head Helge Lund called the
worst attack on Statoil and the oil and gas industry in living memory.
All these workers were employed either directly by the joint venture or
its partners, or by contractors, including the Tigentourine expansion
projects main contractor, Japans JGC Corporation. Other firms with
a big presence include French catering company CIS Catering Rgis
Arnoux, and Algero-British security joint venture Algerian Facilities
Management Company, backed by Algerias RedMed and the UKs
Sterling Facilities Management. BP had 18 employees at the site at
the time of the attack, of whom 14 escaped (two with injuries); the
remaining four were killed. BP said other personnel at the site [were]
contracted to the joint venture and other companies, many of whom
have worked with and for BP for many years. Seventeen Statoil
employees were present when the attack started; four died.
The largest number of fatalities was recorded by JGC, which on 24
January said it had lost ten Japanese employees, including vice
president Tadanori Aratani, with another four foreign employees still
unaccounted for. A Sterling spokesman confirmed its personnel were
involved, but gave no further details.
African Energy Atlas 2013
A new edition of the African Energy Atlas will be published at the
end of March. Expanded to 84 pages, the atlas will feature more
than 60 maps and charts drawn with expert care by journalist
cartographer David Burles.
The Atlas has become an Africas energy infrastructure
Power Pools:
Maghreb Electricity
Bizerte
ALGIERS Skikda

indispensable resource for all

TUNIS Committee (Comelec)
Arzew West African Power
Tangier Oran Constantine
T UNISIA Pool (WAPP)
Oujda GULF OF GABS
Sada Biskra La Skhira
RABAT Fs Gabs Central African
Casablanca OFFSHORE Power Pool (CAPP)
MOROCCO TRIPOLI NILE DELTA
HASSI Az-Zawiya
A RMEL Misratah Tobruk Eastern Africa

A 2009 US diplomatic cable disclosed by WikiLeaks, described

Marrakech HASSI Benghazi Idku Damietta
MESSAOUD Alexandria
Power Pool (EAPP)
Port Said

energy industry professionals,

B Bchar Marsa
BERKINE Ghadames Ras Lanuf Al-Brega Suez Southern African
Agadir BASIN
WESTERN Sinai Power Pool (SAPP)
ALGERIA DESERT CAIRO Taba
GHADAMES GULF OF SUEZ
BASIN Minya
ILLIZI
Adrar BASIN SIRTE
SAHARA In Salah Sabha BASIN Asyut National boundary
El Ayoun MURZUQ Safaga
FIELDS
BASIN L I B YA EGYPT Major oil/gas areas
Western Luxor
and recent significant
Sahara S a h a r a

policy makers and academics

discoveries

a conversation between Mali-based diplomats and Tuareg

(under UN Al-Kufra C
mandate) Abu
Tamanrasset L. Oil pipeline
Bordj Simbel Nasser Halaib
Mokhtar Gas pipeline
e

Nouadhibou
Nil

Atar
D Port Sudan Major hydroelectric
NOUAKCHOTT M A U R I TA N I A Arlit scheme (see table)
E
MALI

with an interest in the continent.

CHINGUETTI Atbara Power transmission
Timbuktu Agadez
Gao ERITREA line
St-Louis
Nma
N I G E R AGADEM Kassala Massawa

leader Abderahmane ag Ghalla, who said he frequently

PRAIA CHAD KHARTOUM Wad
Nig

DAKAR Kayes ASMARA

S U D A N Medani
er

CAPE SENEGAL NIAMEY Maradi Abch

VERDE BANJUL THE BURKINA Zinder El Fasher Gedaref F Mekele Assab
Q Sgou FASO L.Chad
GAMBIA Sokoto Rabak
DOME FLORE BAMAKO Bobo NDJAMENA L.Tana DJIBOUTI
Dioulasso OUAGADOUGOU Kano FULA JB
BISSAU Maiduguri l ue G H DJIBOUTI
GUINEA-BISSAU R GUINEA NIGERIA Maroua I Nil VILLE Boosaaso
Dire
Kankan Ferkessdougou Tamale BENIN V Kaduna
Dawa Berbera
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CONAKRY DOBA Sarh

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TOGO

FREETOWN CTE Dam u ABABA K Harer Garowe

GHANA en BASIN BASIN
Wh

DIVOIRE Ibadan AjaokutaB

It is essential reading for new

SIERRA LEONE L. Volta Wau L ET HIOPIA
Ngaoundr

queried his Algerian colleagues on Algerias position toward

T Kumasi Te W
ite

VENUS; MERCURY
Lagos Enugu CENTRAL SOUTH
A

m U Malka
CAMEROON AFRICAN REPUBLIC
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LI

MONROVIA YAMOUSSOUKRO SUDAN Wakena Dam

PO OV

LIBERIA Port Harcourt Yabelo

N M

BANGUI
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San-Pedro Douala Dolo Odo

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Abidjan NIGER MALABO L.Turkana

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DELTA EQUAT.
Kribi Isiro Gulu UGANDA
SO TOM GUINEA Turkwel Dam MOGADISHU
LLE O

L. ALBERT BASIN M
Selected major hydroelectric
AVI NG

KAMPALA K E N YA
& PRNCIPE OKUME
)

Kisangani Bunia

investors in the region and

LIBREVILLE
(BR F CO

N
schemes Existing and future SO TOM
Port-Gentil
Mbandaka
Mbarara
Kisumu Tana
River
Kismayo
AZZ

GA B O N dams
o

OGOOU DELTA
REP. O

D E M O C R AT I C RWANDA
ng

NAME RIVER CAPACITY

Moctar bel Moctar [sic] reportedly asking on several occasions:

Annobn Y Lake NAIROBI
Co

A Afourer Oued Day 463 MW (Eq. Guinea) R E P U B L I C O F L. Kivu O KIGALIMwanza

Victoria
B Abdelmoumen Issen 400 MW Bandundu
C Aswan High Nile 2,100 MW ETAM Pointe-
Noire
C O N G O Bukavu BUJUMBURA SEYCHELLES
D Kajbar Nile 300 MW EMERAUDE; LOANGO BRAZZAVILLE BURUNDI Arusha Mombasa
Z 1 KINSHASA
Kigoma Lake Pemba I. VICTORIA
E Merowe Nile 1,250 MW CABINDA Tanga
Matadi Kananga Tanganyika
F Tekeze Tekeze 300 MW Zanzibar I.

established operators looking to

LOWER CONGO BASIN
G Tana-Beles Beles 460 MW Soyo Mbuji- Kalemie DODOMA
TAN Z A N I A Dar es Salaam
K a sa

Mayi
H Tis Abay Blue Nile II: 80 MW Iringa Mafia I.
I Grand Renaissance Blue Nile 5,250 MW LUANDA Mbeya
P SONGO SONGO
J Roseires Blue Nile 300 MW Kwanza
% of population River dams
Kihansi
dams
Upper Atbara Dams Atbara & Setit 135 MW

Isnt he working for you? Ag Ghalla professed to be as K Koka, Awash II & III Awash 107 MW with access to A N G O L A Kolwezi 2 Mtwara MNAZI BAY
Sumbe Songea COMOROS
L Gilgel Gibe Omo II: 420 MW electricity 2009 Lubumbashi
MALAWI MORONI
III: 1,870 MW Benguela Copperbelt Lake Malawi Antsiranana
Libya 99.8 Kuito Luena (Lake Nyasa) OFFSHORE ROVUMA
Halale-Werabesa Omo 640 MW

expand their operations across

Egypt 99.6 Ndola Pemba BASIN
M Karuma Victoria Nile 60 MW
100% Huambo LILONGWE Lichinga Mayotte
76% Tunisia 99.5
N Bujagali Victoria Nile 250 MW Mauritius 99.4 Menongue ZAMBIA Nacala
(Fr.)
Owen Falls Victoria Nile 380 MW Algeria 99.3 Mongu LUSAKA Blantyre Mahajanga
Morocco 97.0 Namibe Kafue dams 5
O Ruzizi I-IV Ruzizi 500 MW
4 Zambezi Ikopa River
P Stieglers Gorge Rufiji 2,100 MW
Q Manantali Senegal 200 MW 75%
South Africa 75.0 3 Livingstone HARARE
Tete
UE dams
Ghana 60.5 Rundu Q
R Garafiri Konkour 75 MW 51% Quelimane Toamasina
BI

Victoria

confused as everyone else regarding the Algerian governments

Nigeria 50.6
ZIMBABWE
AM

S Bumbuna Rokel 400 MW Falls ANTANANARIVO

Africa.
T Kossou Bandama 180 MW Cameroon 48.7 Tsumeb Maun Beira Mania MAURITIUS
Bulawayo
MOZ

U Akosombo Volta 1,200 MW 50% Cte dIvoire 47.3 Chicamba & River dams PORT LOUIS
26% Botswana 45.4 Orapa Francistown Mavuzi dams MADAGASCAR
V Kainji Niger 800 MW NAMIBIA Ghanzi
W Mambilla Donga 2,600 MW Senegal 42.0 PANDE; Runion
Zimbabwe 41.5 Selebi-Phikwe TEMANE (Fr.)
X Edea Sanaga 224 MW Walvis
Song Loulou Sanaga 335 MW
Rep. of Congo 37.1
Gabon 36.7
Bay WINDHOEK BO T S WA N A TSHWANE/ Toliara
GABORONE PRETORIA Inhambane
Y Grand Poubara Ogoou 160 MW Sudan 35.9
Z Inga Congo I: 350 MW Namibia 34.0 6

Tolanaro
II: 1,424 MW Eritrea 32.0 Johannesburg MAPUTO
(Outputs: I & II are maximums; Keetmanshoop
III & Grand / IV are projections) III: 3,500-4,250 MW
Angola 26.2 Secunda MBABANE

reticence to go after bel Moctars camps in northern Mali

Lderitz Sasolburg
Grand: 40,000-50,000 MW Benin 24.8 SWAZILAND
al
1 Zongo Inkisi II: 160 MW Togo 20.0 nge
Va

25%
Madagascar 19.0
KUDU Ora Kimberley 7 Richards Bay
2 Nzilo Lualaba II: 120 MW 11% Alexander
Zambia 18.8 Bloemfontein Pietermaritzburg
3 Ruacana Cunene 240 MW Bay 8
4 Kariba North & South Zambezi 1,320 MW Source: Ethiopia 17.0
IBHUBESI MASE Durban
Kenya 16.1 RU
5 Cahora Bassa Zambezi 2,075 MW World S O U T H Gariep & LESOTHO
Energy Lesotho 16.0
Vanderkloof dams

Pre-order your copy

Cahora Bassa North Zambezi 800-1,250 MW Outlook Burkina Faso 14.6
AFRICA
Mphanda Nkuwa Zambezi 1,500 MW 2011 Tanzania 13.9
6 Tubatse PS Steelpoort 1,500 MW Mozambique 11.7 Koeberg nuclear East London
D.R. of Congo 11.1 power plant Mossel
7 Ingula PS (Braamhoek) Wilge 1,333 MW Bay
10% & Cape Town Port Elizabeth

[and] he could only conclude that bel Moctar was receiving

Kilburn Mnj. Tugela 1,000 MW under Malawi 9.0
8 Lesotho Highlands Water Project 182 MW Uganda 9.0
BREDASDORP African Energy 2012
BASIN (www.africa-energy.com)

support from certain quarters of the Algerian government The Atlas will be available to subscribers at the discounted rate of 90
Ag Ghalla said he did not believe that Algerian leaders in (normal price 175).
Algiers were fully aware of what Algerian security services in To pre-order your copy, please email helen@cbi-publishing.com
the southern part of the country were up to.

6 AFRICAN ENERGY ISSUE 247 31 JANUARY 2013


Libya faces new regional security threat
Security alerts in Benghazi and Tripoli in late January have highlighted the extent to which Al-Qaeda may be planning
attacks against Libyan targets, writes John Hamilton
U
ntil now, analyses of Libyan security risk have focused on
the large numbers of weapons in circulation and the
central governments inability to impose its authority on
unruly local militias, some of which have extreme Islamist
agendas. But, following the In Amnas attack in Algeria,
Tripoli now also has to develop a strategy in partnership with
neighbouring governments, including those in Tunis, Algiers
and Cairo, to combat the emerging threat of regionally
orchestrated Al-Qaeda attacks.
On 28 January, the UK Foreign and Commonwealth Office
(FCO) said it was aware of a potential threat to the British
embassy in Tripoli and was liaising closely with the Libyan
government. A few days earlier, the FCO had urged British
nationals to leave Benghazi, saying it was now aware of a
specific and imminent threat to westerners. The Dutch and
German governments followed suit. Although no further
details have been released, a number of sources have said the
threats included the abduction of a westerner, and an attack on
an energy facility in the region. Threats to hydrocarbons-
related targets in other parts of Libya have also been reported.
In mid-January, the Italian government shut its Benghazi
consulate following an assassination attempt on the consul
general.
Some analysts have argued that these threats could come from
local groups. However, a growing body of evidence suggests
that extremists from across the region are in communication
and may be co-ordinating their actions. On 24 January, the
UKs Channel 4 News international editor Lindsey Hilsum
quoted Algerian government intelligence sources as saying that
at least two of the In Amnas kidnappers were also involved in
the attack on 11 September last year in Benghazi which led to
the death of US ambassador Chris Stevens. She also reported
rumours that the leader of the Those who Sign in Blood group,
Mokhtar Belmokhtar, had been seen recruiting in Sirte.
Salafi-jihadist insurgency
A policy briefing published in late January by the UK-based
Quilliam Foundation, a think-tank monitoring radical Islamist
activity, argued that Al-Qaeda in the Islamic Maghreb (AQIM)
has established itself in the Sahel region and hijacked the Tuareg
rebellion to transform the area into a space of savagery for its
own goal of a Salafi-jihadist insurgency.
The briefing, titled Its a Salafi-Jihadist Insurgency, Stupid, said
the spread of the group and its ideology across the Sahel-
Sahara region could both destabilise frail regional governments
and provide space for AQIM to plan and execute terrorist
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Focus
attacks in Europe and the United States of America.
Disturbingly, the senior leadership of the global Al-Qaeda
movement appears to have specifically targeted Libya in its
long-term planning towards this objective. Quilliam said that
it had obtained information that Al-Qaeda leader Ayman
Zawahiri personally designed and supervised the role of Libya
within AQIMs strategy.
Last autumn, Quilliam president and author of the report
Noman Benotman, who is a former member of the Libyan
Islamic Fighting Group and fought with mujahideen in
Afghanistan, privately warned that western intervention in
Mali could lead to extreme Islamist groups with bases in the
Green Mountains south of the towns of Al-Bayda and Darnah
targeting western hydrocarbons interests in Libya.
Benotman recently told African Energy that it was not yet clear
whether the recent security threats in Benghazi, Tripoli and
elsewhere in the country were directly linked to this AQIM
strategy. There are other freelancers operating there with no
particular link to any group, he said, adding that he expected
more attacks in Libya. It is an Al-Qaeda strategy to attack
energy facilities and energy security to provoke the West, he
said.
Security measures
The government in Tripoli initially reacted slowly to the In
Amnas attack, which Algerian intelligence says was launched
from Libya. African Energy understands that the hostage crisis,
just 60km across the border, had been under way for some
hours before reinforcements were sent to strengthen guards
already in place at the main south-west fields. These include
Eni/National Oil Corporation (NOC) joint venture Mellitah
Oil and Gas Al-Wafa gas field, which is near the Algerian
border and is the closest Libyan facility to In Amnas.
Other production facilities in the vicinity are the As-Sharara
and related fields operated by Repsol/NOC joint venture
Akakus Oil Operations and Mellitahs El-Feel (Elephant) field,
which are located west and south-west of Awbari. NOC
subsidiary Arabian Gulf Oil Company operates the El-Hamra
and Hamada fields in the eastern part of the Ghadames Basin.
Security at these fields is officially provided by the Oil
Installation Protection Force, whose numbers have been doubled
to approximately 100 armed personnel. Unlike in Algeria,
where the military bases are outside the facilities, these guards
many of whom have been supplied by Zintan-based militia
groups are reported to be based within the production plants,
which may make them more of a deterrent.
7
Power
MOROCCO
Taqa finalises Jorf Lasfar
financing
Abu Dhabi National Energy Company (Taqa) said on 28 January
it had signed final agreements marking the close of the $1.4bn
project financing for the expansion of the Jorf Lasfar Electricity
Company (JLEL) power plant (AE 234/8). JLEL is already the
largest coal-fired power plant in the Middle East and North
Africa and the first independent power producer in Morocco,
supplying 40% of the kingdoms electricity output. The
expansion project will increase its capacity by 700MW to
2,056MW. Work is about 80% complete and the two new units
are scheduled to be commissioned in December 2013 and April
2014.
The engineering, procurement and construction contract for
units 5 and 6 was awarded to Japans Mitsui & Co and South
Koreas Daewoo Engineering & Construction in 2010. Separate
contracts for two coal unloaders and upgrades to the coal
conveyors at the port of Jorf Lasfar were awarded to Swedens
Cargotec and China Harbour Engineering Company in 2011.
Construction work began in September 2010, with Taqa
providing interim funding. The lenders are financing some 75%
of the total project costs while Taqa is committing $400m of
equity funding. The 16-year, multi-currency non-recourse debt,
maturing in 2028, represents the equivalent of $1.3bn. Working
capital and VAT facilities amount to $100m equivalent. This is
the largest international project financing in Morocco in over a
decade and the first time Japanese and Korean export credit
agencies have participated in Moroccan project finance,Taqa said.
Banque Centrale Populaire, BNP Paribas, Socit Gnrale and been expected to commission late last year has been delayed by
Standard Chartered Bank are the mandated lead arrangers for the
credit facilities. The Japan Bank for International Co-operation,
Nippon Export and Investment Insurance and Export-Import Bank
of Korea are providing direct loans and loan guarantees for more
than 50% of the total project debt.
Taqas commitment to meet Moroccos energy needs was not
conditional on financing, as the project is already 80% complete.
But this financing shows that, for the right deal with the right
structure, significant non-recourse funds can be attracted to the
Middle East and North Africa at competitive rates, said Taqa
vice chairman Abdulla Saif Al-Nuaimi.
GHANA
Takoradi II reaches financial
close
Abu Dhabi National Energy Company (Taqa) and Ghanas state-
owned Volta River Authority (VRA) have completed the
8 AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
$329.6m financing of the Takoradi II expansion project. The
financing package was agreed in July 2012 but it has taken time
to meet the conditions precedent required before financial close
could be reached. In the meantime, low-level construction at
the site and the ordering of some materials has been equity
financed. Notice to proceed has now been issued to the
engineering, procurement and construction contractors, Japans
Mitsui and South Koreas Kepco, which were awarded the
$260m contract in 2011, and construction is scheduled to take
just over two years. First disbursement of the loan package is
expected in early February.
The Netherlands FMO group arranged $212.1m debt,
including $40m from FMO itself, $40m from the Luxembourg-
registered Interact Climate Change Facility, $40m from Agence
Franaise de Dveloppements private sector investment arm
Proparco, $30m from the ICF Debt Pool, $24.9m from Deutsche
Investitions- und Entwicklungsgesellschaft, $22.2m from the
African Development Bank and $15m from The Emerging Africa
Infrastructure Fund. The World Banks International Finance
Corporation has committed to a package worth $117.5m,
downselling $22.2m to the Opec Fund for International
Development and with $15m funding from the Canada Climate
Change Programme (AE 236/8).
The Takoradi II expansion is being developed by Takoradi
International Company (Tico), which is 90% owned by Taqa and
10% by theVRA. The expansion will see the 220MW Takoradi
II single-cycle gas power plant converted to a combined-cycle
facility with the addition of a steam turbine. This will increase
installed capacity to 330MW without requiring more fuel.
Takoradi II is currently operated by a wholly owned subsidiary
of Abu Dhabi-based Taqa Generation International Operating
Company. The 132MW Takoradi III power plant which had
Ghanas elections but will begin operating soon.
BOTSWANA
BPC and Eskom agree new deal
Botswana Power Corporation (BPC) has secured a new three-year
agreement with Eskom to supply the countrys faltering power
system. Frequent blackouts continue as delays commissioning
the 600MW Morupule B coincide with the long overdue
refurbishment of Morupule A and the end of Botswanas
previous power import agreement with Eskom. The new deal
will see Botswana receive 100MW on a firm basis with a further
200MW available on a non-firm basis until 31 July, when
Morupule B is expected to be fully commissioned.
BPC chief executive Jacob Raleru told reporters in December
that Morupule Bs first unit was fully commissioned and
supplying the grid, while Unit 2 had passed construction tests.
Unit 3 underwent a 15-day reliability run in October but had
not been through performance testing. Unit 4 was still being

built. There have been delays to the project following several
deaths on the construction site (AE 234/12). Raleru said
Morupule A was scheduled to resume operations at 60MW
capacity in 2014. BPC will require an additional 300MW
generation capacity by 2017 to avoid load-shedding.
The utility faces further negotiations later this year as a three-year
50MW power purchase agreement with Democratic Republic
of Congo expires. Botswana also imports 90MW from
Mozambique.
ZAMBIA
First Quantum plans
transmission line to Solwezi
Copper miner First Quantum Minerals Ltd plans to build a
$230m transmission line from LusakaWest to Solwezi in North-
Western Province to supply its new Sentinel mine at Kalumbila.
The Lusaka Times quoted First Quantum managing director
Matt Pascall as saying that his company was in talks with Zesco
over a 330kV transmission line that would cover about 400km.
Pascall said First Quantum had agreed terms with Zesco, which
was awaiting the go-ahead from the Zambia Public Procurement
Agency (ZPPA).
We are in talks with Zesco for the construction of a power
transmission line from Lusaka West in Lusaka up to our new
mine, Sentinel, here in Solwezi. This will cost at least $230m
and is projected to be done by June next year, Pascall said. Its
really a race against time and we are anxiously waiting for
Cyprian Chitundu [Zambia Electricity Supply Company
(Zesco) managing director] to call us and give us the good news.
Otherwise, we are ready to start.
First Quantum is investing more than $2bn in the Sentinel
project, which will be Africas biggest copper mine with a
capacity to produce over 500,000 t/yr of copper concentrate.
Pascall said First Quantum was funding the power line to ensure
supply, and would recoup its investment over five years. The line
will pass through and tap power from the 120MW Itezhi-Tezhi
hydropower station, which is under construction, and should
become operational in June 2014.
He said Zesco would own the power line after five years, when
the repayment programme was completed. Half of the money
would be paid as cash and the other half recovered through bills
for power supplied to the mine.
SOUTH AFRICA
Wind and solar developments
The repercussions of the renewable energy independent power
producer (REIPP) procurement programme continue to be felt
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Power
throughout the supply chain in South Africa. Engineering
consultancy Mott MacDonald announced on 17 January that it
had been appointed owners engineer for the 67MW Hopefield
wind farm in the Western Cape. The project is being developed
by Umoya Energy, owned largely by funds managed by African
Infrastructure Investment Managers Ltd, itself established by a joint
venture of Macquarie Group of Australia and Old Mutual
Investment Group (AE 232/11). Hopefield wind farm will
comprise 37 V100 1.8MW Vestas turbines on 2,200 hectares of
land in Saldanha Bay municipality (AE 243/7). Commissioning
is expected in February 2014.
US-based solar power developer SunEdison said this month that
construction was under way at its 28MW Soutpan solar PV
power project, which is being built by Switzerland-based ABB
(AE 245/8). Soutpan is expected to be commissioned in January
2014. It will use around 100,000 280W crystalline-silicon solar
PV panels, which will be guided using locally produced tracking
technology. Work is expected to begin imminently at Soutpans
R1.4bn ($155m) sister solar PV project, the 30MW Witkop
power plant. Local content is estimated at about 40% for both
the Soutpan and Witkop projects.
Chinas Trina Solar announced on 29 January that it had been
awarded a contract to supply solar PV modules to Spanish
engineering, procurement and construction contractor Gestamp
Solar for the 20MW Prieska and 10MW De Aar projects. The
multicrystalline PC05 units will be delivered in Q3 2013. The
units are 15% efficient and have high performance in low light,
according to Trina Solar. Prieska and De Aar are owned by the
Gestamp Mulilo Consortium, which consists of Gestamp Asetym
Solar (lead partner, 60%), South Africas Mulilo Renewable
Energy (20%) and the Mulilo Prieska/De Aar Solar Community
(black-owned trusts, 20%) (AE 232/13).
Environmental impact assessments for the third round of the
REIPP procurement programme are due by 28 February, but
ever-increasing numbers of European newcomers have their eyes
on future rounds. Germanys Schletter and Spains Grupo Clavijo
have formed a joint venture to develop solar PV power plants in
the country. Schletter manufactures PV panel-mounting systems,
while Grupo Clavijo specialises in the design, manufacture and
assembly of solar trackers and structures.
Meanwhile, the state-owned Coega Development Corporation is
working to build South Africas domestic manufacturing capacity
with a tender for contractors interested in building a R300m
22,000m2 wind tower manufacturing facility and associated
infrastructure in the Coega Industrial Development Zone, Port
Elizabeth. Bids are due by 11 February. Construction is
scheduled to begin 1 March, with the plant becoming
operational in November and the first units produced by
December. Administrative buildings are to be completed in
February 2014. The plant will have peak capacity of 110 towers
a year and the potential to increase this to 180. It will be owned
and operated by DCD Wind Energy, which manufactures and
assembles wind turbine components and 50-metre rotor blades
9
Power
at its factory in CapeTown. DCDWind is also involved with the
15MW IsivunguvunguWind Energy Converters project for steel
manufacturer Saldanha Works, owned by ArcelorMittal.
State utility Eskom continues to play catch-up, with construction
of its 100MW Sere wind farm in Koekenaap, Western Cape,
expected to begin in April. The giant utility is yet to identify a
wind turbine supplier or a contractor to supply and install the
132kV transmission line and substation needed to connect the
COUNTRIES AND MARKETS
COTE DIVOIRE: Miga backing for Azito
The World Banks Multilateral Investment Guarantee Agency (Miga) has
pledged its support for the planned expansion of the Azito thermal
power plant in Abidjan. The conversion of the existing Azito plant
from simple-cycle to combined-cycle will bring total capacity to
430MW, increasing electricity production without additional use of
gas. Upon completion, the Azito facility will become the largest
independent power generator in sub-Saharan Africa. Migas investment
guarantee will cover Globeleq Holdings (Azito) Limiteds investment
for up to 20 years against breach of contract by the government of
Cte dIvoire. The main $350m loan package reached financial close
late last year with the International Finance Corporation as lead arranger,
and Proparco co-ordinating financing from European development
finance institutions. The West African Development Bank is providing
financing in local currency, while the African Development Bank
announced a $50m senior loan in December (AE 246/8).
DR CONGO: Electrification tenders
Socit Nationale dElectricit has issued three tenders for the
construction of transmission lines and electrification works forming
part of an African Development Bank-financed electrification project.
One tender is for the construction of a 30kV line connecting Kisangani
and Yakusu, as well as electrification works in Yakusu, in Orientale
Province. The second is for the construction of the 30kV Bandundu
DimaBendela line along with the electrification of Dima and Bendela
towns in Bandundu Province. The third is for the extension of medium
and low-voltage networks in Kabare, South Kivu Province. Bids are
due by 5 March.
Contact: Coordonnateur de la CEEP, Socit Nationale dElectricit, Cellule
dExcution des Etudes et Projets CEP, 2381, Avenue de la Justice BP
500, Kinshasa Gombe. Email: snel_dg@yahoo.fr and
snel_cep.pepur@yahoo.fr. Tel: +243 81 810 36 90.
ETHIOPIA: UK company plans waste-to-energy plant
Ethiopian Electric Power Corporation and Cambridge Industries Energy
signed a $120m agreement on 5 January to build a 50MW waste-to-
energy plant in Addis Ababa on a turnkey basis. Described as the first
of its kind in sub-Saharan Africa, the plant will be fully financed by the
Ethiopian government, and aims to provide clean power to the national
grid and help manage solid waste generated in the city. Cambridge
Industries is also conducting detailed feasibility studies throughout
Ethiopia to recommend future projects in various cities, including Dire
Dawa,Adama, Mekelle, Gonder, Bahar Dar, Hawassa and Jimma.
10
project to the grid. The tender for the latter will close on 22
February. The project will use 46 2.3MW turbines and is
receiving funds from the World Banks Eskom Investment
Support Project and Clean Technology Fund, together
contributing 32.4% of project costs. A further 36.7% of costs
are being covered by the Agence Franaise de Dveloppement and
26.8% by the African Development Bank. Sere is expected to
begin generating in H2 2014.
MOROCCO: Prequalification for pumped storage project
Office National de lElectricit et de lEau Potable has published notice
of prequalification for the 350MW Abdelmoumen pumped storage
project in Taroudant Province. The turnkey contract will include
implementation studies, civil works, materials and equipment supply,
installation, testing and commissioning of the power plant. The facility
will use two reversible 175MW rated Francis turbines and will have a
drop of 540 metres with a 36m3/s flow. Abdelmoumen will help
reinforce the 460MW Afourer hydroelectric power plant. The work
will be financed by loans from the European Investment Bank and
African Development Bank. Bids are due by 29 March.
Contact: Office National de lElectricit et de lEau Potable, Branche de
lElectricit, 65, Rue Othman Ben Affane BP no 13 498 Casablanca 20
000 Maroc.Tel: +212 522 66 82 67/522 66 84 03. Fax: +212 522
43 31 15/522 43 31 12.
TUNISIA: New plant to start up in June
A new 200MW power plant at Bir Mechergua built by the US GE is
due to start up in June, Tunis Afrique Presse quoted industry minister
Mohamed Lamine Chakhari as saying. With demand growing at least
8%/yr, GE is working with the state Socit Tunisienne de lElectricit
et du Gaz to help implement an emergency plan to modernise the
utilitys facilities and reduce power shortages. Planned large-scale
expansion projects have been delayed by political uncertainty following
the Arab Spring.
UGANDA: Karuma bid hits new hurdle
The bidding process for the Karuma dam has again been halted, this
time by an intervention from the Inspector General of Government,
who has called for a fresh investigation into irregularities. The contract
had looked set to be awarded to China International Water & Electric
Corporation as the only company remaining in the bidding after two
years of assorted investigations and other delays. The 600MW project
was originally due to be developed by Norways Norpak consortium.
The government now plans to finance it from the state Energy Fund,
established in 2007 to provide capital for future schemes. Uganda
brought the delayed Bujagali dam on stream last year but will soon
need new capacity to meet growing power demand. The Inspectorate
is particularly concerned about the allegation that there is no evidence
of due diligence carried out on the one and only company that is said
to have qualified to submit or to have its financial bid evaluated, the
Inspector General, Justice Irene Mulyagonja, said in a statement. The
process was halted last year following a tip-off from an anonymous
official at the Ministry of Mines and Mineral Development citing
irregularities in the procurement process (AE 239/9).
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013

Indian Ocean power update: diversification is key
Political uncertainty and lack of investment have hit development in Madagascar, while Mauritius is quietly
diversifying its energy sources, helped by strong private investor interest. African Energys power update reflects
contrasting fortunes for the Indian Ocean Island states
P
olitical turbulence in Madagascar has hit state water and
electricity utility Jiro sy Rany Malagasy (Jirama), which is
starved of investment and struggling to maintain its ailing
network. The utility faced an angry backlash earlier this month
from residents of the numerous towns and cities affected by
blackouts, and managed to carry out rehabilitation work on only
4km of medium-voltage transmission lines and 39km of low-
voltage distribution lines in 2012. The situation has become so
serious that the Agence Franaise de Dveloppement is financing
the maintenance of Jiramas power plant. The utility is heavily
indebted to the government but appears to have postponed
plans to raise equity finance from the private sector. The
freezing of European aid in 2009 was a significant blow, but
work has now resumed at the European-funded 700kW
Befanaova hydroelectric power and electrification project,
which is being built by Italys Zecca Prefabbricati, and there are
hopes that bigger projects will follow.
In a recent appraisal report, the African Development Bank
described Comoros two state-owned electricity companies
Madji na Mwendje ya Komor and Electricit dAnjouan as being
beset by problems relating to governance, internal management
and fraud. The price of electricity in Comoros is high
compared with neighbouring islands, at 42c/kWh, pushed up
by institutional problems and the price of petroleum products
used to fuel its thermal power plants via costly long-term
contracts.
Mauritius has been relatively successful in diversifying its
sources of supply, though a 100MW coal-fired power plant at
Pointe aux Caves has experienced long delays due to
environmental concerns since Malaysian developer CT Power
COMOROS
Overview. Madji na Mwendje ya Komor (MA-MWE) manages power and
water in Grand Comore and Mohli, while Electricit dAnjouan manages
power on Anjouan. Installed capacity is sufficient to meet demand, but system
inefficiencies and poor governance mean frequent power cuts. AE: 246/7.
Energy Sector Reform and Financial Governance Support Programme.
AfDB sponsored project. World Bank also targeting energy sector governance
through its budget support programme. Finance: AfDB ($3m grant approved
Dec 2012). AE: 246/7.
Moroni (18MW). Power project in the pipeline to receive a $41.6m
concessional credit from Exim Bank of India.
Mohli Island solar. ACP-EU Energy Facility approved grant to MA-MWE
Q1 2011 to establish six mini-grid solar power plants on Mohli Island.
Comoros is believed to have significant geothermal potential, but the
resource has been little studied. Australias Sinclair Knight Merz and New
Zealands Gafo Energy are involved with mapping.
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Power update
signed a power purchase agreement in 2008. Local media
reported on 23 January that the environmental impact
assessment had finally been awarded. Delays in the coal project
have forced the Central Electricity Board (CEB) to begin the
redevelopment of the 70MW St Louis diesel power plant to
avoid a generation shortfall in 2014. CEB accounts for around
40% of electricity generation in Mauritius, using its four thermal
power plants and nine hydroelectric facilities. The remainder is
purchased from independent power producers, notably coal and
sugarcane waste plants.
The French territory of Runion is the site of two ambitious
wave power projects. The first to begin operating will be the
15MW CETO project being developed by Australias Carnegie
Wave Energy and French companies EDF and defence
contractor DCNS. The project will use Carnegies CETO 4
hydraulic system, which was installed in the sea in May 2012.
Delays putting a buoy in place mean that the project is expected
to commission by April, following an inspection of subsea
elements, and will not begin generating power until several
months of testing have been carried out. DCNS ocean thermal
energy conversion project is also moving ahead, although a fully
functioning offshore facility will not be constructed for several
years at least. An onshore prototype was moved to the University
of Runion in April 2012 for further studies and technical
training of students to begin. Test results to date have confirmed
early assumptions about the performance of the generation
module. DCNS is aiming to generate power using the
technology at a cost of 250 ($336)/MWh, the same as
34c/kWh, which is expensive by the standards of some African
countries but broadly cheaper than diesel power.
National utilities have total installed capacity of around 29MW. Known
operating power plants include:
Mwali and Moroni (6MW). Two diesel generators.
Maharani (100kW). Hydroelectric power plant.
Miringoni (12kW). Hydroelectric power plant.
MADAGASCAR GENERATION
Overview. Development plans by Jiro sy Rany Malagasy (Jirama) hit by
political instability, which saw donor funding dry up. As well as bigger hydro and
thermal plants, Jirama operates a large number of small thermal generators
supplying towns.
MADAGASCAR HYDROELECTRIC
PLANNED
Andekaleka HEP (116MW). Two 29MW turbines operating, powered by
50,000m3 capacity dam. Plans to double capacity with two further 29MW
11
Power update
turbines. Sinohydro signed agreement with Jirama Q3 2008 for 29MW third
turbine, held up by problems raising funds from donors. EIB put 24.5m loan
for installation of fourth turbine on hold in 2009 after suspending all aid to
Madagascar. Finance: Total cost of third and fourth turbine 40.3m. Third
turbine finance from OFID, BADEA and Kuwait Fund. $10m IDA credit for
rehabilitation work at existing project. AE: 165/23, 145/11, 144/13, 141/9,
125/10, 115/10.
Volob (56MW). $370,366 USTDA grant part-funded by Paul C Rizzo
Associates for development study for project to power nickel mine and local grid
in 2005. Study completed 2009, recommends 2x28MW units, $180m capital
requirements and 33 months construction timeline. USTDA says project has
merit, but remains on hold. EDF completed preliminary studies for the Ivondro
River site in 2000. AE: 235/7, 93/25.
Ambodiroka (40.5MW). Hydropower project on the Betsiboka River.
Chinas CAMC Engineering awarded $143m contract September 2008 to
construct plant, 200km 220kV and 18km 63kV transmission lines and
substations. Project originally expected to be completed in four years. Jirama
conducted feasibility study in 1982. Financed by Chinese government loan. AE:
151/11, 146/14.
Talviana Falls (15MW). Hydroelectric power plant planned at Talviana Falls
by Swiss cement company Holcim. Will supply the companys Antsirabe plant.
Negotiations with government under way. AE: 235/7.
Befanaova (700kW). Twin-turbine Sahambano River hydropower unit and
rural electrification project under construction in Ihosy. Being developed by
Zecca Prefabbricati (Italy). Project had been postponed due to political
instability but has now been resumed following an intervention by the EU.
Concession contract signed 9 August 2012. Finance: 2.5m of 3.3m total cost
to come from ACP-EU Energy Facility. AE: 173/12.
Antafofo (580MW). Preliminary study carried out by EDF in 2000 for
hydropower site on the northern Ikopa River. AE: 235/7.
Mahavola (300MW). Preliminary study for hydropower site on the Ikopa
River carried out by Sethem in 1982. AE: 235/7.
Mananara Sud (300MW). Hydro site near Betoafo. Development will
depend on whether Rio Tinto Alcan goes ahead developing a bauxite mine in
the Atsimo-Atsinanana area. AE: 235/7.
Sahofika (300MW). Long-term hydroelectric project on the Onive River.
Preliminary study conducted by PEMC-RI Tana in 1982. AE: 235/7.
Antoara (190MW). Jirama carried out preliminary studies in 2000 for hydro
site on the Tsiribihina River. AE: 235/7.
Antetezambato (180MW). Possible hydroelectric site on the Mania River.
Preliminary study completed by PEMC-RI Tana in 2000. AE: 235/7.
Ampandriambazaha (15MW) and Andranomamofona (15MW).
Hydroelectric sites identified by Jirama on the Mahavavy River, Diana region.
Lokoho (4MW). Hydropower plant planned in Sava region. Established as
PPP between Germanys GTZ and private partners e8 a consortium of EDF,
RWE and Hydro Quebec and local firm Electricit de Madagascar (EDM).
Suspended since 2009 due to political situation and now very unlikely to go
ahead.Associated rural electrification programme. Grants from ACP-EU Energy
Facility, soft loans from KfW.
OPERATING
Antelomita II (3.7MW) and Mandraka (24MW) HEPs. Jirama project for
plants rehabilitation. AE: 126/8.
Sahanivotry HEP (15MW). IPP on stream 2008. Built by Frances Hydlec.
Finance: $24m AfDB, local BFV-Socit Gnrale and Mauritius Commercial
Bank. AE: 235/7, 148/12, 144/13.
Tsizompaniry (5.2MW). Hydroelectric power plant owned by Henri Fraise
Fils & Cie. Inaugurated in 2008. AE: 235/7.
Mahitsy (12MW) and Maroantsetra (1.2MW) HEPs. Hydlec developing,
carried out studies at 15m cost. Maroantsetra commissioned August 2010,
Mahitsy delayed currently with no known due date. AE: 148/12, 144/13.
Also HEPs operating atToamasina (6.8MW),Antetlometa (3.7MW),Antalaha
(1.9MW), Vatomandry (0.13MW), Fianarantsoa (6.05MW), Maroantsetra
(1.2MW) and Namorona.
12
MADAGASCAR THERMAL
PLANNED
Fenerive Est (60MW). China Geo-Engineering Corporation, also known as
Mainland, included a 60MW power plant in plans for an ilmenite mining project
in the southern Fenerive Est district. Feasibility study was expected by end-2012.
Demand at the mine expected to peak at around 30MW leaving possibility of
selling to the national grid. Construction not expected to begin for two to three
years and dependent on successful conclusion of EIA. AE: 235/7.
Sikily. Gas-fired power project being developed by Mocoh ResourcesAmicoh
in collaboration with Jirama. Prefeasibility study completed; feasibility study now
being considered. Project to be built at Manja, no longer at Tulear. Gas from
Amicohs Sikily-1 well.
OPERATING
Mandroseza (40MW). Wrtsil built new unit on site of old Antananarivo
plant with four 18V38 diesel generating sets, inaugurated February 2008.
Finance: Netherlands grant (51%), ten-year Dutch-guaranteed loan (49%). AE:
108/18.
Toamasina IV (18MW). Thermal plant supplying east coast.
Fort Dauphin (23.8MW). Diesel power plant supplying Rio Tintos QMM
ilmenite mineral sands project, with 1.5MW feeding the grid. Contracts:Wrtsil
turnkey contract for six nine-cylinder 32 diesel generating sets, and O&M
contract. AE: 235/7, 138/9, 108/18.
Ambatovy (18MW). Planned installation of nine 2MW diesel generators
supplying a nickel and cobalt project, owned by Canadas Sherritt International
and SNC Lavalin, Japans Sumitomo and Seoul-based Korea Resources
Corporation. The consortium intends to supply its processing plant, which
requires 80MW, via three 45MW coal-fired boilers. AE: 235/7.
MAURITIUS THERMAL
PLANNED
CT Power project (100MW). Two-unit coal-fired plant planned at Pointe
aux Caves to be operated by Malaysian company CT Power (Mauritius) as an
IPP. Long delays due to environmental concerns. Reports that the EIA had been
granted in January 2013. AfDB assisting in invitation in June 2012 for EoIs for
transaction advisers to help structure and tender the project.The adviser will also
assess the existing PPP structure and PPA, which was signed December 2008.A
Ministry of the Environment official was quoted by local media saying that
construction would begin within six months with commissioning expected in
2014. Equity is held by CT Power (74%) and CEB (26%).
OPERATING
Fort George thermal (138MW). Refurbished after fire in January 2008.
St Louis (70MW) and Nicolay (78MW). CEBs other two thermal power
plants. Mott MacDonald Ireland Ltd completed EIA for redevelopment of St
Louis mid-2012 to replace old generators and increase capacity. Redevelopment
necessitated by CT Power coal project delays. St Louis currently comprises six
5MW Pielstick generators, commissioned 1978-1981, and three 13MW Wrtsil
engines, commissioned in 2006.
Fort Victoria redevelopment (43MW). Fort Victoria redevelopment
(43MW). Phase 1: two new 15MW units, commissioned 2010. Phase 2: adding
four new units due to commission in 2013. Mott MacDonald is owners
engineer.
MAURITIUS COGENERATION
Kiscol Bagasse project (18MW). Bagasse project planned by Kwale
International Sugar Company Ltd, owned by Kenyan company Pabari
Investments Ltd and Mauritius Omnicane.
Compagnie Thermique de Savannah (87MW). Bagasse cogeneration IPP,
started up April 2007.
Beau Champ bagasse/coal plant (24MW). Started up April 1998 at CIEL
Group sugarcane plantation.
Centrale Thermique de Belle Vue (70MW). Bagasse/coal cogeneration
plant, started up 2000.
FUEL IPP (36MW). Developed by Flacq Union Estates Ltd as islands first
bagasse/coal plant.
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
 Power update

Power generation in the Indian Ocean islands

KENYA 0 Km 80 0 Km 30
Aride Praslin
0 Miles 40 0 Miles 15
Njazidja
Flicit
(Grande Comore) Curieuse VICTORIA
Mombasa Mah
MORONI Anse Volbert
T T Foumbouni Praslin T Amirante
Tanga North
BAIE STE ANNE La Digue
Pemba I. C OMOROS Islands
Platte
MIRINGONI
Mutsamudu Nzwani
(Anjouan)
S E YC HE L L E S
Fomboni FUTURE
Zanzibar I. H Domoni Silhouette POWER LINE? SEYCHELLES
Zanzibar Mwali Frgate
(Mohli) T S VICTORIA Ste Anne
Alphonse
Dzaoudzi T VICTORIA B Cotivy
Dar es W T VICTORIA C (ROCHE CAIMAN) St Franois
Salaam
MAMOUDZOU Mah
Anse Royale
Mayotte
I N D I A N
TA N Z A N I A

(Fr.)
Mafia I.
O C E A N
Songo Songo I.
St Pierre Providence
Aldabra Atoll

FO RT G
Atoll Cap Malheureux

FO
Cosmoledo

RT EO
Atoll

VI RG
ST ORI
NI UIS
CT E

CO
Goodlands

LO A
Assomption Farquhar

LA
Astove BELLE VUE

Y
Atoll
T T T T PLAINE-DES-
Mtwara ROCHES
PORT LOUIS W
a Palma POINTE T
v um
Ru AUX CAVES
Njazidja
(Grande Comore) M A UR I T I US BEAU
MORONI COMOROS Cape
Bobaomby
Quatre Bornes
BIGARA CHAMP
Nzwani les Glorieuses Vacoas Grand River SE
(Anjouan) (Fr.) Antsiranana
(Diego Suarez) Curepipe
T TAMARIND FALLS H W H CHAMPAGNE
Mwali LE VAL H
(Mohli) H Mahbourg
MOZAMBIQUE

TH. DE SUD
MAMOUDZOU BRITANNIA W FERNEY
Pemba Nosy B SAVANNAH
Mayotte T Pointe ST AUBIN
(Fr.) H ANDRANOMAMOFONA Sud Ouest 0 Km 20
H AMPANDRIAMBAZAHA Souillac
0 Miles 10
T Sambava
L

Nacala H
ST-DENIS
E

BEANDRAREZONA H Antalaha W
N

Ste-Suzanne
Moambique Le Port La Possession BOIS ROUGE
H Maroantsetra
N

Mahajanga
T T T S Ga LIGNE DES 400 S St-Andr
An
A

Salazie M t
ton

let

St-Paul
H BRAS DESRIV.
LIANES
s
H

gi

TAKAMAKA DE LEST
lB

Angoche
H Ste-
C

H
ay

Rose
le Juan de Nova
(Fr.)
ISANDRANO H
H AMBODIROKA Nosy Boraha
BELLEVUE I /
MANIRON
R u n i onS W
ANTAFOFO / ANTANANDAVA H St-Leu H (Fr.)
T FENERIVE EST H H BR. D.L. PLAINE PITON DE LA
E

ANDAKANA / VOHITSARA H H BELAVENONA GOL FOURNAISE

os

CHEMIN
T Ambatondrazaka
U

Betsi

Cila

MAHAVOLA H S CANAL LANGEVIN

VOLOB H H T
Ikopa

St-Louis
I Q

boka

Toamasina S SYNDICAT H
RANOMAFANA H H ANDEKALEKA Pierrefonds St-Pierre
MAHITSY H 4 MANDRAKA S ~ St-Philippe
1 ANKARAMAVO / T AMBATOVY ~
B

ANKOTROFOTSY ANTANANARIVO H 4 5 ANTETLOMETA 0 Km 20

AMPEFY H H Vatomandry
M

2 AMBARARATAVOKOKA / TAZOALAVA T H5 0 Miles 10

ANKARAMAINTY Tsiribihina H MANDROSEZA SAHOFIKA / ANDASIROTSAKA
A

3 ANTETEZAMBATO H H Antsirabe H H LOHAVANANA

ANTOARA 1 H H SAHANIVOTRY PORT LOUIS
Z

Morondava 2 H
T 3 Mania H MANANDONA
O

MAD AGASCAR ST-DENIS MAURITIUS

M

H
TSITONGAPIANA H H NAMORONA Runion
Bassas da India
(Fr.)
T Fianarantsoa T (Fr.)
y
Ma ngok
SIKILY
(gas-to-power)
le Europa
(Fr.)
BEFANAOVA H I N D I A N O C E A N
W BETOAFO
Toliara (Tulear) T (MANANARA) H TROPIC OF CAPRICORN

T
Tolanaro
(Fort Dauphin) 0 Kilometres 400
African Energy 2013 Cape Vohimena
(www.africa-energy.com) 0 Miles 200

AFRICAN ENERGY ISSUE 247 31 JANUARY 2013 13

Power update
Compagnie Thermique du Sud (34MW). Coal/bagasse IPP commissioned
2005.
Union St Aubin plant fired by coal and bagasse. Began operation Q3 2005;
20-year PPA with CEB signed by CTDS. AE: 108/18.
Moin Loisir Sugar Estate (14MW). Bagasse cogeneration facility.
Medine (10MW). Bagasse cogeneration power plant.
Mon Desert Alma (11.2MW). Bagasse cogeneration facility.
MAURITIUS RENEWABLES AND WASTE
PLANNED
Solar EoI (10MW). CEB tender for EoI for photovoltaic projects totalling
10MW closed May 2011.
Gamma-Conventa (20MW). Waste-to-energy project.
Plaine des Roches (18MW). 18x1MW GEV HP wind turbines to produce
33GWh/yr for 65,000 homes. Frances Aerowatt Mauritius Ltd submitted EIA
Q3 2010. Swedish Energy Agency is a project participant. Financial close had
been expected this month with commissioning expected H1 2013. Funded from
private sources. CDM registered. AE: 194/10.
Britannia wind (22MW). Aerowatt collaborating with Mauritian sugarcane
and ethanol producer Omnicane. Omnicane undertook preliminary studies in
February 2009-March 2010, providing positive wind data. AE: 194/10.
Bigara wind (25-40MW). CRISIL Risk and Infrastructure Solutions Ltd
(India) selected as transaction adviser. AE: 148/12.
OPERATING
Champagne (30MW). Hydroelectric power station commissioned in 1984.
Mare Chicose landfill gas (3MW). Sotravic. Commissioned Q4 2011.
La Nicolirel Feeder Canal IPP (350kW). Small hydroelectric power plant.
Other hydroelectric power plants are operating at Ferney (10MW),
Tamarind Falls (commissioned 1945, 11.1MW), Le Val (4MW), Rduit
(1.2MW), La Ferme (1.2MW), Cascade Cecile (1MW) and Magenta (940kW).
REUNION (FRANCE)
PLANNED
Bellevue I (445kW) and Maniron (220kW). Government invited
prequalification applications for the planned hydroelectric power plants by
November 2008. Contractors sought for civil works and supply of single Pelton
turbine-generators, other hydromechanical and electromechanical equipment,
automation, and remote monitoring. Construction expected to take 18 months
at estimated cost of $2.07m. AE: 147/14.
OPERATING
Le Port (185MW). Diesel power plant.
Port Est (80MW). Thermal power plant.
REUNION RENEWABLES
PLANNED
Two planned waste to power projects at Sainte-Suzanne (1.2MW) and
Pierrefonds (5MW).
CETO project (15MW). Australias Carnegie Wave Energy, EDF, and French
marine defence contractor DCNS signed MoU June 2010 for three-stage wave
project offshore Runion. Commissioning expected Q1 2013. Manufacture and
installation managed by DCNS. Equity: Carnegie 49%. EDF 51%. Finance:
French government part funding with $5m grant, EDF Energies Nouvelles
50% owned by EDF Group and Runion government also financing.
Pelamis Wave Energy Converters (30MW). Wave energy project expected
to begin operating in 2014.
Ocean Thermal Energy Conversion (1.5MW). Prototype project being
developed by DCNS.
Sainte-Rose (15.3MW). EDF EN was awarded building permits to develop
two solar PV power plants with 15.3MW combined capacity in 2008. Panels
from Frances Photowatt.
Prison du Port (10MW). Solar PV power project.
14
Glossary
TERMS
CDM Kyoto Protocol Clean Development Mechanism. EIA
environmental impact assessment. EoI expression of interest. GWh
gigawatt hour. HEP hydroelectric power plant/project. IPP Independent
power producer. kV kilovolt. kW kilowatt. kWh kilowatt hour. MoU
memorandum of understanding. MW megawatt. O&M operation and
maintenance. PPA power purchase agreement. T&D transmission and
distribution.
COMPANIES AND INSTITUTIONS
AfDB African Development Bank. Badea Arab Bank for Economic
Development in Africa. CEB Central Electricity Board (Mauritius). EIB
European Investment Bank. Jirama Jiro Sy Rano Malagasy. KFAED
Kuwait Fund for Arab Economic Development. KfW Kreditanstalt fur
Wiederaufbau (Germany). Ofid OPEC Fund for International
Development. PUC Public Utilities Corporation (Seychelles). USTDA
US Trade and Development Agency.WBG World Bank Group.
Piton de la Fournaise (15-100MW). Geothermal prospect. Geothermal
exploration had been abandoned in 1987 after two unsuccessful wells but is
being reconsidered.
OPERATING
Bois Rouge (100MW). Coal and bagasse fired cogeneration facility.
Gol (110MW). Coal and bagasse cogeneration plant.
St Louis (2MW). Biogas facility.
Rivire de lEst HEP (67.2MW). In June 2008 EDF awarded contract to
Alstom Hydro to supply 23.7MW Pelton turbine-generator. Delivered and
installed July 2010. AE: 147/14, 141/10.
Takamaka I and II (43.4MW). Hydroelectric power station.
Other HEPs at Langevin (3.6MW), Bras de la Plaine (2.2MW), Bras des Lianes
(2.2MW).
Wind power facilities operating at Sainte-Rose I (6.3MW), Sainte-Rose
(15MW) and Sainte-Suzanne (Arowatt, 10.1MW).
SEYCHELLES
Overview. State Public Utilities Corporation is responsible for electricity,
water and sewerage. Existing grid supplying south-east Mah is overloaded and
new developments cannot be connected to the network. Vulnerability of
network leads to power trips and shortages. PUC is studying network
reinforcement, as well as conducting feasibility study into underground cable
connection between Mah and Praslin islands.
Waste-to-energy project (1-4MW). Expected 2013-2014.
Victoria (6MW). Wind project expected to begin operating in 2012.
Renewable energy development. Government and Abu Dhabis Masdar,
owned by Mubadala Development Corporation, to carry out wind resource
assessment on Mah Island, part of agreement signed January 2009 to develop
renewable energy in Seychelles. Four wind measurement masts to be installed at
Inner Harbour, La Misre,Tea Factory and Four Seasons. Projects next phase will
consist of environmental, technical and commercial feasibility studies to install
wind energy generators. AE: 179/11, 174/14.
OPERATING
Baie STE Anne (8MW). Diesel power plant on Praslin Island, formerly
Victoria A.
Victoria B (19MW). Diesel power plant.
Victoria C, Roche Caiman (32MW). Diesel power plant on Mah using
seven Wrtsil engines.
Roche Caiman expansion (8MW). PUC plans to add two engines.
Praslin (2.5MW). Diesel generator. Finance from OFID.
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013

MOROCCO
Chevron agreements underline
appetite for Atlantic Margin
The 22 January announcement by Chevron Corporation that its
Chevron Morocco Exploration Ltd subsidiary had signed
petroleum agreements with the state Office National des
Hydrocarbures et des Mines (Onhym) for three offshore areas
underlines the extent of international oil company (IOC)
enthusiasm for entry into the Moroccan Atlantic Margin
offshore play (AE 242/1). This could be consolidated if market
rumours of exploration success in the region by Repsol, Cairn
Energy/Longreach/San Leon or another operator are confirmed.
Chevron is taking deep-water acreage, which at up to 4,500
metres could significantly expand the scope of exploration by
Onhyms partners.
Vice chairman George Kirkland welcomed a deal which
provides Chevron an opportunity to advance our growth
strategy in frontier basins. In a statement, the US major said it
would acquire seismic data and conduct studies in the Cap Rhir
Deep, Cap Cantin Deep and Cap Walidia Deep areas, located
over 29,000km2, some 100km-200km offshore west and north-
west of Agadir. The average water depths range from 100 metres
to 4,500 metres. Chevron Morocco Exploration has taken a 75%
working interest in the three areas, with Onhym holding the
rest.
Other deep-water activity is expected in 2013, with Kosmos
Energy planning to drill a potentially controversial well in Q4
on its Cap Boujdour permit, which straddles the Moroccan
deep south and disputed Western Sahara. UK-based newcomer
Cairn Energy also plans a deep-water well in Q4 on its Foum
Draa Block.
Plains Exploration enters
Moroccan play
Also moving into Morocco is US minnow Plains Exploration
and Production Company (PXP), which is to pay Australian
independent Pura Vida Energy $15m upfront for a 52% stake in
the Magazan deep-water permit. PuraVida, which will use the
funds to finance capital spending, including new work in
Gabon, will retain 23% and Moroccan state Office National des
Hydrocarbures et des Mines (Onhym) 25%.
According to Australian Stock Exchange-listed Pura Vida, the
farm-out will provide funding for various exploration
operations up to a maximum of $215m, including a firm
commitment to fund and drill two exploration wells. It said
planned drilling would test multiple play types, including the
giant Toubkal prospect, which it claims has a mean resource
potential of 1.5bn bbls. PXP will be appointed operator.
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Upstream oil and gas
Elenilto in West African push
Israeli miner Elenilto has expanded its presence in West Africa,
winning the operatorship of Senegals Offshore Sud Shallow Block and
being shortlisted for a phosphate mining licence in Togo.
The 7,920km2 Senegal block, in which Elenilto is partnered with
Petrosen, has existing 2D seismic, and Elenilto plans to launch a 3D
survey shortly. The company has had a presence in Senegal since
2010 in the hydrocarbons and minerals sectors, and says its
operations there are managed by UK-based businessman David
Ericson of Capital & Investment Management.
Elenilto is part of Israeli businessman Jacob Engels Russia-focused
real estate company Engelinvest. The company, which has no track
record in oil exploration but recently acquired a licence in Georgia,
was controversially awarded the Western Cluster iron ore concession
in Liberia in 2010 and sold down a 51% stake after an investigation.
It was among the bidders for Block SL-07A-10 offshore Sierra Leone,
and announced on 15 August it had been awarded a majority stake
and the operatorship of the block (AE 238/1). But Israeli-owned
Minexco Petroleum, which has offices in London and Gibraltar, said
that, on 7 September, it signed a petroleum agreement with the Sierra
Leone Petroleum Directorate for the block. Parliament ratified the
agreement on 21 September. Minexcos team includes former Afren
head of exploration Nick Johnson.
Elenilto, in a joint venture with Chinas Wengfu Group, is one of three
companies shortlisted to develop a phosphate deposit in Togo with an
estimated 2bn tonnes of reserves.
PuraVida said, following the cash payment and approvals, PXP
would fund 100% of the costs of various exploration operations,
making the deal a maximum of $215m. The carried costs
include a firm commitment by PXP to fund and drill an
exploration well primarily targeting the Toubkal prospect and a
second well targeting a prospect to be agreed. The PXP-funded
carried costs include Onhyms 25% share of exploration costs.
Pura Vidas managing director, Damon Neaves, said that
among the Mazagan joint venture and our nearest neighbours,
we expect at least five exploration wells in the locality of
Mazagan to be drilled in 2014. This represents an
unprecedented investment in exploration offshore Morocco
which will target significant resources and has the potential to
alter the energy landscape in Morocco. The Toubkal well is
likely to be drilled in 2014.
GHANA
Eni appraises Sankofa discovery
Eni has successfully appraised the Sankofa oil discovery on the
Offshore Cape Three Points Block with the Sankofa East 2A
well. The company estimates the overall potential of the Tano
Basin discovery to be around 450m barrels of oil in place, with
recoverable resources of up to 150m barrels, and has begun
15
Upstream oil and gas
planning for commercial development of the oil reserves.
Studies are also under way for the development and
commercialisation of the blocks gas reserves, in line with a
memorandum of understanding signed last year by Eni and
block partners Vitol and Ghana National Petroleum Corporation
with the Ministry of Energy (AE 238/11). The MoU focuses
particularly on the domestic gas market, in which Eni and its
joint venture partners aim to play a prominent role.
Development of Ghanas domestic gas infrastructure is lagging
well behind oil, and has been held up by wrangling over
competing priorities for the resource.
Eni estimates overall recoverable resources in the block of
approximately 450m barrels of oil equivalent, including gas,
associated liquids and oil.
Sankofa East 2A was drilled 8km south-west of the Sankofa East
X1 discovery well and confirmed the extension of the oil
accumulation in the Cenomanian sequence. The well was
drilled in 990 metres of water and reached a total depth of 4,050
metres, encountering 23 metres of gas and gross condensate pay,
and 76 metres of gross oil pay in Cretaceous sands.
Just before Eni farmed into the block in September 2009,Vitol
announced a gas discovery with the Sankofa-1 well. Sankofa,
which has potential to become the first development of non-
associated gas from the Ghana offshore, was followed in 2011 by
the Gye Name-1 well 16km to the east, which encountered gas
and condensates.
NAMIBIA
Galp farm-in approval paves
way for drilling
The government has approved the farm-out of a 14% stake in
three offshore petroleum exploration licences (PELs) to
Portugals Galp Energia by Brazils HRT Participaes em
Petrleo SA. The farm-out, announced in November, relates to
PEL 23 in the Walvis Basin and PELs 24 and 28 in the Orange
Basin. HRT will remain as operator.
With this formal approval by the government of Namibia,
HRT has fulfilled all the requirements of the farm-out
agreement and we can confirm we will commence operations
in Q1 2013 for our exploratory campaign in Namibia, said
HRT chief executive Marcio Rocha Mello.
On 15 January, HRT said the semi-submersible drilling rig
Transocean Marianas had arrived offshore Ghana on its way to
Namibia. The company said the rig would take three weeks to
reach Namibian waters and would then undergo mandatory
maintenance for the next 21 days before starting HRTs drilling
campaign in the Walvis and Orange basins.
The Marianas is expected to be on location to start drilling the
16
COUNTRIES AND MARKETS
GABON: Pura Vida takes Nkembe Block
Australias Pura Vida Energy has signed a production-sharing
contract for the offshore Nkembe Block. It will operate the block
with an 80% stake, alongside the state of Gabon, with a 20% carried
interest. The Nkembe Block covers 1,210km2 in water depths of
50-500 metres, about 20km off the coast of Gabon, close to several
producing oil fields. Mitsubishi has a recent discovery in the Batanga
formation in the adjacent block to the north, while Total has
production from the Batanga formation in nearby fields adjacent to
the Nkembe Block to the north-east, and Perenco from similar
reservoirs to the east of the block. Pura Vida has acquired existing
well and seismic data on the Nkembe Block, and will also purchase
845km2 of previously acquired 3D seismic data from WesternGeco.
Pura Vidas founding directors Damon Neaves and David
Ormerod were previously at Tap Oil; Ormerod also spent a year
managing Sterling Energys Senegal and Guinea Bissau assets.
COMPANIES AND PEOPLE
WILTON RESOURCES: Khelils advisory role
Former Algerian energy and mines minister Chakib Khelil, now
in private practice with consultancy company Mantral, has joined
Calgary-based Wilton Resources as a senior adviser. The Canadian
start-ups ambition is to become a significant international oil and
gas player through the acquisition and development of high-impact
world class assets. It has an Algerian pedigree, as Wiltons founders
led by president Richard Anderson are the managerial team
which used to run First Calgary Petroleums (FCP), a Canadian
company that benefited enormously from its Algerian dealings
during the decade that Khelil was in office. Wilton presents itself as
the successor company to FCP a title that has provoked
considerable comment in Algiers. Wilton has also retained former
Nigerian petroleum resources minister and Opec secretary-general
Rilwanu Lukman as an adviser. The two industry veterans
attempted early last year to launch a consultancy group with former
Iraqi oil minister Issam Chalabi and Libyas former oil minister
Shukri Ghanem (AE 230/21). The Chalabi, Ghanem, Khelil &
Lukman Associates venture fell apart when Ghanem died in
mysterious circumstances near his residence inVienna last April (AE
227/1).
first well, on the Wingat prospect on PEL 23, by the end of Q1.
Wingat is located in 1,000 metres of water, and drilling
operations are expected to take about 60 days.
SOUTH AFRICA
Thombo Petroleum launches
seismic survey
Thombo Petroleum has announced the start of 3D seismic
acquisition over the A-J1 graben in Block 2B, off the west coast
of South Africa (AE 243/12). The survey, by WesternGeco, aims
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
 Upstream & Downstream hydrocarbons and markets
to reveal the extent of the A-J1 oil discovery, drilled by Soekor
in 1988, and to look at other prospects and leads in the graben
which have been identified from existing 2D seismic data.
The 686km2 survey is due to complete in February. Swedens
Crown Energy has an option to acquire Thombo, which has 75%
in the block alongside Afren, with 25%. Thombo is a privately
owned company with South African shareholders. Thombos
directors include Energy Africa founder John Bentley.
Kinetiko widens CBM area
The Petroleum Agency SA has accepted Kinetiko Energys sixth
technical co-operation permit (TCP) application, for 3,823km2
of gassy coalfields east of the Amersfoort project. This increases
the Australian companys potential coalbed methane
exploration area to 15,707km2.
The Amersfoort project (Kinetiko 49%, South Africas Badimo
Gas 51%) covers an area of 1,601km2 in Mpumalanga, and
Kinetiko now has six TCP applications covering 14,106km2
(Kinetiko 100%) of prospective land, of which four TCPs are
granted and cover 7,890km2.
Three pilot production wells are being drilled on the northern
Amersfoort licence, and are scheduled for completion in Q1
Anadarko awards multiple FEED contracts for
Mozambique LNG
Anadarko has awarded FEED contracts for the onshore and offshore elements of its planned liquefaction plant, but
development may not be plain sailing, writes Thalia Griffiths
A
nadarko Petroleum Corporation has awarded multiple
contracts to carry out front-end engineering and design
(FEED) work for the first phase of its planned liquefied
natural gas (LNG) facility in Cabo Delgado Province. For the
onshore element of the project, Bechtel, CB&Is joint venture
(JV) with Chiyoda Corporation, and the Fluor/JGC JV, will all
carry out studies for a multi-train liquefaction plant with a
nominal train capacity of 5m t/yr of LNG, and an overall LNG
park plan that will allow for future expansion of the facility to
approximately 50m t/yr.
The offshore installation FEED work will be carried out by
Technip, a JV of Subsea 7 and Saipem, and a JV of McDermott
and Allseas, which will come up with a full engineering,
procurement, installation and commissioning plan for the
plants subsea production systems.
Anadarkos partner PTTEP said that, once the designs and
estimated costs were submitted, an LNG contractor and
offshore contractor would be selected for engineering,
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Aminex loses chief executive
Aminex chief executive Stuard Detmer has left the company after 15
months to pursue other business interests. Aminex chairman Brian
Hall, who had stepped back from the day-to-day running of the
company after Detmers appointment, has returned as executive
chairman, the post he retired from in December 2011.
The company has been frustrated by delays in bringing the Kiliwani
North gas field on line, which have affected cash flow and
development plans for the Ntorya discovery, but Aminex announced an
$8m loan from Argo Capital Management on 17 January. The loan
will provide working capital, particularly for the companys Tanzanian
operations, and the company hopes to repay the loan from proceeds of
the sale of its US assets, which is currently under way.
The company has also launched a farm-out process for its Ruvuma
Basin licence, and said on 29 January it had extended the bidding
period for its proposed farm-out at the request of several interested
parties. The bidding process is now likely to be completed in March,
Aminex said.
2013. These wells will be followed by two to three more on the
southern licence, following approval by the regulator. The pilot
programme will determine gas flow rates and recoverability,
from which first gas reserves should be defined by Q2.
procurement, construction, installation and commissioning
contracts.
Anadarko, as operator of Offshore Area 1, and Eni, as operator
of Offshore Area 4, signed heads of agreement on 21 December
establishing basic principles for the co-ordinated development
of their common natural gas reservoirs. PTTEP, which bought
Cove Energy last year, said the agreement was designed to
facilitate a work programme whereby the two operators will
conduct separate, but co-ordinated offshore development
activities, while jointly planning and constructing common
onshore liquefaction facilities at Cape Afungi.
First commercial LNG sales from the facility are planned for
2018, though Rio Tintos $3bn writedown from its
Mozambique coal project, announced on 17 January, offers a
timely reminder of the infrastructure challenges of developing
big projects in frontier countries. Rio Tinto bought Australias
Riversdale Mining for $3.7bn in 2011, when other big mining
companies were more cautious about bidding because of
17
Downstream hydrocarbons and markets
concerns about how to export the coal.
In Mozambique, the development of infrastructure to support
the coal assets is more challenging than Rio Tinto originally
anticipated. Rio Tinto sought to transport coal by barge along
the Zambezi River, but this option did not receive formal
approvals, Rio Tinto said in a statement. It said these
infrastructure constraints, combined with a downward revision
to estimates of recoverable coking coal volumes, had led to a
reassessment of the overall scale and ramp-up schedule for the
project, but added: Rio Tinto continues to engage with the
government of Mozambique on all transport infrastructure
options.
Rio Tinto said it expected to include a non-cash impairment
charge of $14bn in its 2012 full-year results on 14 February.
As well as the $3bn from Rio Tinto Coal Mozambique, this
includes reductions in the carrying values of Rio Tintos
aluminium assets (mostly Rio Tinto Alcan but also Pacific
Aluminium) in the range of $10bn-$11bn.
Chief executive Tom Albanese has stepped down, as has Doug
Ritchie, who led the Mozambique coal acquisition.
Mozambique is often held up by the donor community as an
example of successful post-conflict recovery and economic
development, but the reality is more nuanced. Since the
development of the Pande and Temane gas fields and the Mozal
aluminium smelter, there has been a significant delay. The
government has talked up a range of projects, such as the
Mphanda Nkuwa hydro project, but there has been little
progress on the ground.
Eni and Anadarko will look closely at Rio Tintos experience
as they co-ordinate on their proposed gas liquefaction project.
Many observers assume Mozambique will advance more
rapidly and smoothly than Tanzania, which is less experienced
with foreign investment and less open to foreign investors in
policy terms, but a development on this scale is a huge
challenge for the Mozambican state as well as the companies
involved.
BENIN/REGION
Gasol links with Azeris for LNG
supply
Afren affiliate Gasol has signed a strategic alliance agreement
with Azerbaijans Socar Trading SA (STSA) in relation to its
proposed liquefied natural gas (LNG) import project in Benin.
STSA will supply the LNG for the project and assist Gasol with
the provision of a floating gas storage and regasification vessel
in Cotonou harbour. The project involves the regasification of
LNG to supply power and industrial customers in Benin, Togo
and Ghana, replacing supplies promised, but not delivered, by
the West African Gas Pipeline (WAGP) (AE 245/19).
18
COUNTRIES AND MARKETS
ALGERIA: Shake-up in Medgaz ownership structure
Spanish groups Iberdrola and Endesa (now part of Italys Enel) have
found a buyer for their respective 20% and 12% stakes in the Medgaz
company that runs the gas pipeline linking north-western Algeria to
southern Spain. The Belgian/Canadian Fluxys consortium has
concluded a 233m ($313m) transaction to become the largest
shareholder in Medgazs capital, as the Spanish firms decided to exit
as part of efforts to curb debt. In early January, Spanish distributor
Gas Natural Fenosa (GNF) announced it had signed a 61.9m deal
with Algerian state company Sonatrach to take a 10% interest in
Medgazs capital. This followed a mid-2012 agreement for
Sonatrach to cede part of its 36% stake in Medgaz in exchange for
taking a 3.8% interest in GNF. These deals are subject to approval
by the Medgaz board, and will reduce Sonatrachs stake to 26%.
Fluxys would control 32% of Medgaz, with Spains Cespa holding
20% and Frances GDF Suez 12%.
ANGOLA: Trafigura completes Sonangol sale
Trader Trafigura has completed the sale of a 20% stake of its
midstream and downstream subsidiary Puma Energy to Angolan
state oil company Sonangol for an undisclosed sum (AE 217/20).
The agreement announced 29 September 2011, is an important
first step in Puma Energys strategy to open up its capital to strategic
and public investors alike,Trafigura said. The companies, through
their affiliates Sonagas and DT Holdings, have also agreed to develop
joint investment opportunities in gas and natural gas liquids, and
their trading. The agreement follows 10% stakes taken by Sonangol
as part of Pumas acquisition of BPs downstream assets.
COTE DIVOIRE: SIR financing
Socit Ivoirienne de Raffinage (SIR) has signed an agreement for a
$120m structured financing to enable the Abidjan refiner to import
crude supplies. The financing, signed on 15 January, was led by
Banque Atlantique-Cte dIvoire, along with Chaabi International
Bank, a subsidiary of Moroccos Banque Centrale Populaire. The
Ivorian and Moroccan banks are both subsidiaries of holding
company Atlantic Business International. Banque Atlantique has
also arranged financings for the 71,000 b/d refinery in previous
years. SIR supplies the domestic market as well as neighbouring
countries and energy supplies are a key element in Cte dIvoires
efforts to recover from its civil conflict and restore its status as the
biggest economy in the West African franc zone.
Originally launched to export gas from Equatorial Guinea
and Nigeria, Gasol is now pursuing a new strategy based on
supplying gas within West Africa. Gasol is 65% owned by
Africa Gas Development Corporation, owned by Liberian
energy and mining entrepreneur Ethelbert Cooper, who was
also a co-founder of Afren. Another 14.9% is owned by Afren,
while 20% is traded on Londons Alternative Investment Market
(AIM).
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013

STSA is the international marketing and development arm of
Socar, the state oil company of Azerbaijan. Gasol said the
strategic alliance would ensure the supply of LNG and the
storage and regasification vessel on competitive terms.
Our alliance with STSA represents a major step towards our
goal of bringing gas to Benin,Togo and Ghana, which remain
significantly gas constrained in their power plants and
industries, chief operating officer Alan Buxton said in a
statement. In line with the boards new strategy, the strategic
alliance with STSA provides Gasol with access to LNG and a
storage and regasification vessel, but just as importantly, STSAs
experience in the development of such projects. STSAs
expertise and experience will, I am sure, provide significant
assurance to the lenders to our LNG import project.
The medium-term strategy for Gasol is to take associated gas
Griffiths Energy guilty of Chad bribery
Griffiths Energy International has been hit with a record fine for paying bribes as part of its efforts to secure
exploration acreage in Chad, after the companys new management uncovered evidence of wrongdoing and
reported it to Canadian police
G
riffiths Energy International has pleaded guilty to bribery
charges and agreed to pay a record C$10.35m fine related
to its operations in Chad. The Alberta Court of Queen's
Bench found that the company had paid US$2m to the wife of
the Chadian ambassador to the United States and Canada as
part of its efforts to acquire oil and gas properties in Chad.
According to a statement filed in court, Griffiths Energys late
founder Brad Griffiths and his business partner Naeem Tyab
spent six months in 2008 establishing contacts within Chads
embassy and inquiring about oil and gas leases there. Griffiths
died in July 2011 in a boating incident.
According to the statement, Griffiths Energys outside legal
counsel advised against paying off ambassador Mahamoud
Adam Bechir because he was a government official. Instead,
Griffiths paid a fee to a company owned by the ambassadors
wife, handing over a $2m consultancy fee in February 2011.
Griffiths Energy signed three production-sharing contracts
(PSCs) with the Ndjamena government in 2011; the 2,744km2
Mangara/Badila PSC, which comprises the DOB and DOI
blocks, the 22,206km2 Doseo/Borogop PSC, made up of the
Doseo and Borogop blocks, and the 826km2 DOH PSC. The
blocks consist mostly of acreage relinquished by ExxonMobil.
The state has a 25% back-in right.
Once Griffiths obtained the exploration acreage, he appointed
Gary Guidry as chief executive in July 2011 to bring in the
necessary oil expertise. Guidry was previously chief executive
of Lundin Group company Tanganyika Oil Company, which
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Finance and policy
from Afrens oilfields in Nigeria and send that through the
WAGP. But as Afrens gas is unlikely to be available before
2017, Gasol is looking to stimulate gas markets in the meantime
through LNG imports.
Gasol has signed a joint venture agreement with Benins Socit
BenGaz to form a gas marketing company called Cogaz SA.
BenGaz has a 2% stake in the WAGP and is owned by Edgar
Yves Monnou, an influential former foreign minister and
ambassador to Paris. All natural gas to be sold by Cogaz will be
purchased from Gasol or one of its affiliates, and Gasol has a
memorandum of understanding for Cogaz to supply gas to the
Benin-Togo Communaut Electrique du Benin (CEB). Currently
the only offtakers of WAGP gas are the CEB and Ghanas Volta
River Authority, which are not receiving anything like the
quantity contracted from Nigerian marketer NGas.
was bought by Chinas Sinopec in December 2008. Other new
executives and directors followed, and they discovered Griffiths
bribery activities as they prepared for an initial public offering
(IPO). The company set up a committee to investigate itself
and reported the matter to the Canadian police. The IPO was
subsequently cancelled (AE 225/16).
Griffiths Energy regrets the actions of the prior management
and board. When we discovered the contracts, we blew the
whistle and co-operated with the authorities because this is
how Griffiths Energys current management and board conduct
business, Guidry said in a statement. The negotiated
resolution addresses the interests of all stakeholders. Now that
the matter is closed, Griffiths Energy can focus all of its
attention on oil exploration, development and production in
Chad.
Griffiths said: The company affirms that no influence was
actually obtained as a result of providing the benefits to the
foreign public official, and that the award of its production-
sharing contracts was not in any way connected to the
improper promises and benefits indirectly provided to the
foreign public official. These proceedings have no impact on
the security and veracity of the companys significant licence
area in Chad and the case is now closed.
The company plans to start development with the Mangara
field, to generate short-term cash flow. This would include
construction of a 120km pipeline, with anticipated capacity of
25,000 b/d, to transport production from Mangara to tie in
19
Finance and policy
with the Chad-Cameroon export pipeline.
The conviction was brought under the 1999 Corruption of
Foreign Public Officials Act, which Canada has in the past been
criticised for doing too little to enforce. In March 2011, the
Organisation for Economic Cooperation and Development
criticised limits to the acts jurisdiction, insufficient numbers of
investigators, and weak penalties for convictions. In May 2011,
Transparency International suggested Canada was a long way
behind other developed countries, identifying it as one of 21
states undertaking little or no enforcement of their anti-
bribery legislation, and the only G7 state in that category.
Torontos Globe and Mail said the case marked the second
conviction for the Royal Canadian Mounted Police (RCMP)
since the force established teams dedicated to investigating
foreign corruption. A case against Niko Resources in 2011 saw
the company pay C$9.5m for bribing former Bangladeshi
energy minister Mosharraf Hossein by providing him with a
vehicle and paying his travel expenses on a trip to Canada and
the US.
More recently, the Montreal-based engineering company
SNC-Lavalin has said it will look into fresh allegations
contained in a 59-page RCMP affidavit that former company
executives paid some C$160m to late Libyan leader Muammar
Qadhafis son Saadi Qadhafi, currently in hiding in Niger, to
steer contracts in Libya. According to The Globe and Mail,
which had applied to have the affidavit unsealed,Riadh Ben
Aissa did not merely approve of alleged bribes. The former
SNC-Lavalin executive masterminded an intricate system for
rewarding Saadi Qadhafi with more than $160m in bribes in
exchange for engineering contracts in Libya, the Royal
Canadian Mounted Police alleges. Some of the payments
were labelled consulting commissions. SNC-Lavalin had a
C$50m contract to build a new airport in Benghazi, which it
has now lost. Ben Aissa, who was in charge of the companys
operations in Libya, is in prison in Switzerland, after being
arrested on suspicion of money-laundering and bribery in
North Africa.
NIIGERIA
IFC issues naira bond
The World Banks International Finance Corporation (IFC) has
announced plans to issue a $50m local currency bond
(equivalent to 8bn naira) to support Nigerias domestic capital
markets and increase access to local currency finance. The IFC
Naija bond will be the corporations first naira-denominated
bond and the first placement by a non-resident issuer in the
countrys domestic capital markets. The IFC said the Naija
bond was targeted at investors such as pension funds, insurers,
asset managers and banks wanting to diversify their portfolio
while investing in high-quality assets. IFC bonds are rated
triple-A by Moodys Investors Service and Standard & Poors.
20
Tyab brothers influential role
The names of the Griffiths Energy International co-founders, Naeem
and Parvez Tyab, may be familiar to those who follow the sometimes
shadowy world of Canadian oil minnows operating in Africa. The
other co-founder was the late Canadian financier and businessman
Brad Griffiths, who died in mid-2011. The Tyabs served as directors
until July 2011, when a new board and management were appointed.
The brothers, along with another sibling, Nasim, have been active on
the global investment scene for many years, and Naeem was very
involved in Griffiths Chad deal. According to the Globe and Mail,
which saw the agreed statement of facts filed at the Alberta Court of
Queen's Bench, Naeem Tyab travelled to Chad where Griffiths
Energy eventually secured oil and gas leases. He signed a so-called
consulting agreement with Chads ambassador to Canada as part of
the firms hunt for oil in Chad. When Griffiths lawyers spiked that
idea, he signed an identical consulting agreement with a firm owned
by the ambassadors wife, according to the court document. When
that document expired, he signed the renewed consulting agreement
with the same company, which translated into a $2m bribe, according
to the court filing. The paper noted that it was Naeems Mogul
Energy that was first used to start exploring opportunities in Chad
Parvez Tyab was a director of the former Energy Africa and Elf
Aquitaine geologist Alain Mizelles Prevail Energy, which in
2007-08 was awarded a stake in the Republic of Congo Mengo-
Kundji-Bindi project. In 2010, Norwegian company Pan Petroleum
bought Montreal-based Prevails interest in that asset Pan later
merged with Norse Energy and is now called Panoro Energy. At the
time it was thought Mizelle had brought Tyab who was often
described in the Canadian press as controversial or a controversial
promoter into Prevail because Tyab was head of the Egypt-focused
Sea Dragon Energy, which held a stake in Prevail. Indeed, it is
thought that Naeems Mogul Energy introduced Sea Dragon to Egypt:
in February 2007, Sea Dragon settled a claim made by petroleum
geologist Dr Ghareen Awad, who had sued the company over rights to
an Egyptian oil concession. Awad said he had arranged the farm-out
of the property to Mogul Energy, which had sold part of its interest to
Sea Dragon.
The third Tyab brother, Nasim, chairs the Vancouver-based Oracle
Energy Corporation, at one time heavily involved in Yemen before
turning to operations in Texas and Romania, and more recently to
Nigeria. In August 2012, Oracle signed a memorandum of
understanding with Nigeria-based Bolad Energy, to participate as
the technical and financial partner in the new marginal field bidding
round expected to be announced by the Nigerian Department of
Petroleum Resources.
Bolad is chaired by Babatunde (Segun) Agboola, a former employee
of Mobil Producing Nigeria (AE 218/14).
Bond proceeds will support IFCs private sector development
programme.
Vibrant domestic capital markets are the foundation for lasting
growth and, in Africa, they can mobilise capital to close the
financing gap for key sectors such as infrastructure and
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013

housing, said IFC vice president and treasurer Jingdong Hua.
Chapel Hill Advisory Partners Limited and Standard Chartered
are lead managers of the transaction.
The IFC Naija bond will support the governments efforts to
deepen domestic capital markets in Nigeria. It will help pave
the way for other issuers in the domestic markets and makes
DEVELOPMENT FINANCE
AfDB: Kaberuka looks forward to Abidjan return
The African Development Bank Group is expected to receive the
green light from our governors at our annual summit in Marrakesh in
May to return to its headquarters in Cte dIvoire after a decade in
which the exiled multilateral has enjoyed Tunisian hospitality,AfDB
president Donald Kaberuka said in a 17 January speech to ambassadors
based in Tunis. The move will then start in a phased and gradual
manner, Kaberuka said. Fundamental for us are security, staff welfare
and business continuity. Ours is a very resilient institution and I assure
you the exercise will be conducted with a high level of professionalism.
AfDB: Bond pricing
On 16 January, the African Development Bank (AfDB) priced a $1bn
fixed-rate US dollar global benchmark bond due 15 March 2018. The
transaction pays a coupon of 0.875% and a spread of five basis points
over mid-swaps, equivalent to 20.45 basis points over the UST 0.75%
due 31 December 2017. Joint lead managers are BNP Paribas,
Deutsche Bank, JP Morgan and Nomura. In terms of spreads to
Treasuries, this is the tightest ever transaction executed by the Bank
and reflects strong investor demand for top-quality US dollar
denominated supranational product, the AfDB said. Strong interest
from central banks early on helped to create momentum within the
order book. Main drivers of the transaction were central banks and
other official institutions at 75%, with asset managers at 10%, banks at
9% and corporates at 6%. The geographical distribution was well
balanced, with Asia and Americas at 31% and 30%, respectively,
followed by Europe at 20% and the Middle East and Africa at 19%.
EADB: Equity boost from AfDB
The African Development Bank (AfDB) board has approved a $24m
equity investment in the Kampala-based East African Development
Bank (EADB) to strengthen its balance sheet and help improve its
international credit rating. Of the total, $10m will be paid in with
the balance in the form of callable capital. The AfDB said the
transaction would support capital market development, government
revenue generation and foreign exchange, ultimately stimulating
economic development and employment opportunities in the region.
EADB member states include Kenya, Rwanda, Uganda and Tanzania.
Its activities mainly take the form of loans, leases and equity
participations. The AfDB said the project will help the EADB
consolidate the gains of its recent restructuring programme, and
strengthen its capital base. This is a crucial condition for mobilizing
financial resources from capital markets at more affordable terms and
meeting the growing demand for investment in the East African
Community.
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
Finance and policy
available funds that can be put to work in the local economy,
said IFC country manager Solomon Adegbie-Quaynor.
In May 2012, IFC launched its pan-African domestic medium-
term note programme, focusing on Botswana, Ghana, Kenya,
Namibia, Rwanda, South Africa, Uganda and Zambia. IFC
has also obtained approvals to issue local currency bonds in
Kenya.
SUDAN: China commits to $1.5bn loan to halt decline
With Khartoums finances in disarray following South Sudans
independence (it has lost nearly three-quarters of its crude production,
which was around 450,000 b/d in H1 2011), China has agreed to
provide support. Finance minister Ali Mahmoud said the funds would
come from an unidentified Chinese bank, with guarantees from state-
controlled China National Petroleum Corporation,to bridge the fiscal
gap and enhance our balance of payments. Mahmoud told Reuters
the loan would help to stem the budget deficit and stabilise the
Sudanese pound, which has depreciated sharply.
CORPORATE FINANCE
MADAGASCAR OIL: Share placing
Madagascar Oil has carried out a share placing and open offer through
London-based natural resources investment bank GMP Securities
Europe to raise 49.5m ($78.4m) at 18p/share. The offering is fully
underwritten by existing shareholders. GMP is joint bookrunner to
the offering, which replaces a financing package announced on 18
December for a $15m short-term loan, plus $45m share subscription
agreement. Todays announcement sees a pre-emptive issue of
common shares to all shareholders that has been demonstrated to be a
considerable improvement on Decembers proposed financing
arrangement and will enable the company to realise the significant
potential of its asset base in Madagascar, said GMP vice chairman
Simon Catt. Madagascar Oil is preparing to start continuous steam
injection from the Tsimiroro steam flood pilot project in Q2 2013.
Laurie Hunter and Mark Weller stepped down as chairman and chief
operating officer in December and were replaced by existing non-
executive directors Andrew Morris as non-executive chairman and
Paul Ellis as chief executive.
RESOURCES
TANZANIA: Barrick raises $142m for gold project
African Barrick Gold (ABG) on 22 January announced the conclusion
of negotiations with a commercial banks syndicate led by Standard Bank
for the provision of a $142m export credit-backed term loan. The
facility repayable over seven years at a spread of 250 basis points over
Libor will be used to expand ABGs Bulyanhulu process plant, with
the construction of a new carbon-in-leach circuit. Chief executive
Greg Hawkins said ABG had sufficient cash to fund the expansion, but
what he described as this cost-effective form of project financing
would allow for efficient capital allocation and enhanced returns. The
facility is secured on the project,Tanzanias largest gold scheme.
21
Diar y
2013
30 Jan-1 February: 4th Annual Anti-Corruption & Compliance
To be held in London. Web: www.ibcfinance.com/event/exportcredit
4-5 February: CSP Today South Africa, Pretoria
Web: www.csptoday.com/southafrica/index.php
5 February: The Africa Summit, London
Organised by Economist Conferences. Web: www.economistconferences.co.uk
6-8 February: East Africa Petroleum Conference & Exhibition
To be held in Tanzania. Web: www.eac.int
18-21 February: Nigeria Oil & Gas, Abuja
A CWC event. Web: http://cwcnog.com
19-21 February: Africa Energy Indaba, Johannesburg
Web: www.energyindaba.co.za
25-27 February: Gas/LNG as Alternative Resource
To be held in Johannesburg. Web: http://neo-edge.com/event-line-up
25-28 February: Energy Process Excellence Africa
To be held in Cape Town. Web: http://www.energyprocessexcellence.co.za/
26-28 February: East Mediterranean and North African Gas
Forum, Rome
Web: www.emnagasforum.com
27-28 February: Power Industry North Africa, Morocco
Web: www.powerindustry-events.com/redirect.html
27-28 February: Insuring Export Credit & Political Risk, London
Web: www.iiribcfinance.com/event/exportcredit
28 February-1 March: AfroInvest Oil & Gas London 2013
Organised by AfroInvest. Web: www.afroinvest2013.com
11-15 March: Flame 2013, Amsterdam
Web: www.icbi-flame.com/FKN2348AE
12-14 March: Mozambique Gas Summit, Maputo
A CWC event. Web: www.mozambique-gas-summit.com
12-14 March: World Biofuels Market, Netherlands
Green Power Conferences. Web: www.worldbiofuelsmarkets.com
17-19 March: Power Gen Africa, South Africa
A PenWell event. Web: www.powergenafrica.com
18-20 March: 8th Pipeline Technology Conference, Germany
Web: www.pipeline-conference.com
19-21 March: Offshore West Africa, Ghana
Organised by Penwell. Web: www.offshorewestafrica.com/index.html
22
20-21 March: Private Equity World Africa, London
Web: www.terrapinn.com
26-28 March: Cape V, Gabon
Web: http://cape-africa.com
8-11 April: Power and Electricity World Africa, Johannesburg
Web: www.terrapinn.com
9-11 April: Liberian Mining, Energy & Petroleum Conference
Organised by AME Trade. Web: www.limep.com
15-18 April: Exploration and Commodity Investment, Lusaka
Organised by IQPC. Web: www.commoditiesafrica.com
16-17 April: Botswana Coal and Energy Conference, Gaborone
Organisd by IMM Events. Web: www.immevents.com
16-19 April: 17th International Conference & Exhibition on
LNG, Houston
A CWC event. Web: www.lng17.org
22-24 April: 19th Western Africa Oil, Gas & Energy, Windhoek
A Global Pacific event. Web: www.petro21.com/events/?id=794
23-25 April: Ghana Summit, Accra
A CWC event. Web: http://cwcghana.com
25-26 April: 6th Annual Sub-Saharan Africa Oil Conference
To be held in Houston. Web: www.energycorporateafrica.com
14-15 May: Africa Utility Week, Cape Town
A Spintelligent event. Web: www.african-utility-week.com
14-16 May: Energex Africa 2013: 3rd Intl Exhibition, Gauteng
Web: www.exhibitionsafrica.com
21-23 May: Angola International Oil and Gas Conference and
Exhibition, Angola
Web: www.aiogace.com/indexEN.html
28-30 May: Uganda Mining, Energy & Oil & Gas
An AMETrade event to be held in Kampala. Web: www.umec-uganda.com
18-20 June: Zambian International Mining & Energy
Organised by AME Trade. Web: www.zimeczambia.com
18-20 June: Eastern Africa Oil, Gas & Energy, Nairobi
Web: www.petro21.com/events/?id=808
18-21 June: Africa Energy Forum, Barcelona
Web: www.energynet.co.uk/AEF/AEF2013/index.html
24-26 June: North Africa Gas Summit, Rome
Web: www.north-africa-gas.com
AFRICAN ENERGY ISSUE 247 31 JANUARY 2013
African Energy view
Morocco pushes security from renewables with new solar tenders
Following its success at drawing in cheap financing and qualified bidders for
the 160MW first phase of the 500MW Ouarzazate independent power project
(IPP), Moroccan Agency for Solar Energy (Masen) has issued
prequalification bids to install another 300MW at the southern site. According
to prequalification documents for the so-called OZZ CSP Next programme, due
for submission by 25 March, 200MW of this will come from concentrated solar
power (CSP) and 100MW will be generated from a tower with storage capacity.
Mines and energy minister Fouad Douiri says tenders will be issued later in
2013, for groups to design, finance, build, operate and maintain the units.
Bidders already lining up to participate include Alstom and Saudi Arabias
Acwa Power International. Meanwhile, Masen is also seeking (by 21
February) a technical consultant for phase two.
CSP is also the preferred technology for the first phase, being developed by a
group led by Acwa, and supported by 25-year power purchase agreements
signed by Masen and state utility Office National de lElectricit et de lEau
Potable (ONEE) (AE 240/8). With these ground-breaking schemes, Morocco is
on the way to meeting its plan to generate 2GW from solar power by 2020.
According to Douiri, the government plans to tender for a 400MW-500MW solar
project in the Oujda region, by 2014, and other sites have been identified.
Along with plans to generate at least 2GW from wind by 2020, this is an
ambitious programme, criticised by Moroccan politicians and others who argue
that, while renewables are to be welcomed for providing clean energy, they
represent a costly long-term investment at a time of pressing short-term needs
and deteriorating domestic and external balances. However, the experience of
Ouarzazate so far offers a counter-argument, based on acceptable costs and
strategic concerns, which industry experts say will be even stronger as the cost
of equipment falls in years to come.
AFRICAN
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The projects first phase attracted huge donor interest, allowing it to be
developed at a very competitive price. Acwa won the bid after it offered a
significantly lower tariff than its rivals, of $0.0189/kWh; it will still get an
acceptable rate of return on this, executives told African Energy. Indeed, the
Saudi company says that, even without subsidised pricing, it could have
brought in the Ouarzazate phase one job at $0.024/kWh which is competitive
for a peaking plant. The latest Morocco IPP bid for a baseload plant the coal-
fired Jorf Lasfar Electricity Company units 5 and 6 scheme, for which
developer Abu Dhabis Taqa and offtaker ONEE have just reached financial
close (see Power) came in at $0.013/kWh. Acwa has grown quickly by
developing projects in Saudi Arabia; its bids for Ouarzazate reflect a proactive
internationalisation strategy, led by Paddy Padmanathan, who while at Black
& Veatch developed Algerias debut independent water and power project.
With international business reflecting on the terrorist attacks against Algerian
gas infrastructure, another argument used by Morocco to push the renewables
agenda is gaining greater substance: that of security. Officials such as Masen
head Mustapha Bakkoury and Agence Nationale pour le Dveloppement
des Energies Renouvelables et de lEfficacit Energtiques Sad Mouline
have highlighted the long-term security, of price and supply, that wind and
solar programmes offer to carbon import-dependent Morocco.
The OZZ CSP Next prequalification document sets out objectives, including
optimising the generation mix while reducing dependency on primary energy
imports; encouraging the launch of a local renewables manufacturing industry;
and establishing the kingdom as the first North African developer of scalable
solar generation. If the pricing is right and the leadership can stick to its long-
term view which would span several elections then a Moroccan model may
emerge for sustainable, secure energy planning, with renewables at its centre.
ENERGY
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