News Guide Africa

Tag: investment

  • Gov’t committed to develop Afina-1X as it holds substantial gas amidst unitization withdrawal

    Caption: Government commits to developing Afina-1X, highlighting its substantial gas potential amidst unitization withdrawal.

     

     

    Adnan Adams Mohammed

     

    Government of Ghana has withdrawn the compulsory unitization directives imposed on ENI Ghana and Springfield in relation to the Afina-1X Discovery and the Sankofa Cenomanian Oil Fields.

     

    This follows President John Mahama’s earlier instructions given to the minister to withdraw the Unitization Directives a fortnight ago during ENI’s President visit at the Jubilee House and further consultations and dialogue with relevant stakeholders.

     

    The Minister of Energy and Green Transition in a statement issued last week indicated that government will explore options for coordinated development within and near the WCTP 2 contract area and continue to support Springfield as an Indigenous Ghanaian Exploration & Production Operator to commercialize the Afina discovery which has proven to have potential to add to Ghana’s reserves of oil and gas. However, the withdrawal of the Directives is without prejudice to the power of the Minister to issue new directives where necessary for the equitable and efficient development of Ghana’s petroleum resources.

     

    “It is also note-worthy that the appraisal of the Afina discovery has revealed the potential for substantial gas resources which would enhance Ghana’s energy security and sustainability”, John Abdulai Jinapor said in the statement.

     

    “The government will work with Springfield and other contractors nearby to monetize these gas resources in an expeditious manner.”

     

    Meanwhile, ENI Ghana has welcomed the decision of the Minister to withdraw the Unitization Directives in relation to the Sankofa oil field issued in 2020.

     

    ENI has further indicated that in line with the Government’s objectives, it remains committed to leverage its portfolio of innovative projects, seizing new opportunities both in the traditional and transition energy sector, while strengthening domestic energy security and sustainability.

     

    Consequently, the government reiterates its commitment to maintaining a conducive environment for investments in the upstream petroleum sector while ensuring compliance with the legal and regulatory framework governing the industry.

     

    The withdrawal decision of the Minister follows a thorough review of the Arbitral Award referenced SCC Arbitration U2021/114 (ENI & Vitol v. Ghana & GNPC) dated 8th July 2024, and the legal opinion provided by the Attorney General and Minister of Justice.

     

    While the Ministry acknowledges the Tribunal’s findings that while the issuance of the Directives breached the Petroleum Agreement due to the specific circumstances of their implementation, the concept of unitisation itself was not deemed inherently unlawful.

     

    “This provides Ghana with the flexibility to determine the most appropriate course of action in the national interest”, the minister noted.

     

    Currently, the Petroleum Commission is evaluating the appraisal report of the Afina 1X well as the government believes that the Afina field has the potential for a future unitization or a development on its own. Government has confidence in Afina’s potential as a future unitized field or a tie back to an existing infrastructure for development.

     

    Although, government acknowledges that the Tama field, which is on the Springfield block, holds 1.2 TCF of gas and can greatly contribute to the country’s energy security. It encourages both ENI & Springfield to keep the door open for negotiations to determine an amicable and commercially optimal solution.

    The decision is expected to assuage the worries of international oil companies, many of whom saw the unitization directive as a form of oil nationalism by Ghana since it effectively assigned a large proportion of ENI’s proven reserves to locally owned Springfield before the latter had met international standards in proving that its own discovery is as large as it claims.

     

    The government remains open to dialogue with its partners aimed at charting the best way forward in the sustainable exploitation of its natural resource endowments.

     

     

     

     

  • Jospong Group’s Chief Investment Officer advocates capacity building in carbon financing at COP29

    Jospong group

     

    The Chief Investment Officer of Jospong Group of Companies (JGC), Mr. Noah Gyimah, has emphasised the need for capacity building in carbon financing.

     

    At a 29th Conference of Parties (COP29) of the United Nations Framework Convention on Climate (UNFCCC) side event panel discussion on November 14, 2024, he highlighted capacity building’s crucial role in carbon financing for developmental projects, during the session “New World of Carbon Markets: The Potential of Existing Infrastructure and Impact of Investments in the Green Economy.”

     

    “Developing capacities in both the private and public sectors is essential for understanding which projects attract carbon financing,” he noted.

     

    He cautioned that “if that is not done, it becomes a matter of just talking about climate change without knowing what it takes to commercialise these activities to attract capital.”

     

    The COP29 opened in Baku, Azerbaijan, on Monday, November 11, 2024, with a pressing call for world leaders to agree on an ambitious new global climate finance goal.

     

    The two-week COP29 conference (11-22 November, 2024,) will focus on several key thematic areas, including the World Leaders Climate Action Summit, finance, investment and trade, energy and peace, relief and recovery, and science, technology and innovation.

     

    Mr. Gyimah used the opportunity to share Jospong Group’s success story, securing $20 million from the Swiss Government through the support of the Ghanaian Government.

     

    “This was made possible through a combination of technical expertise from scientists together with sustainable finance experts to do the calculation from carbon emission sums and then to convert it into a financial model to say that if I am able to remediate this number of CO2, it corresponds to this sum of dollars,” he explained.

     

     

    He also highlighted the importance of capacity building in project finance, data collection, and technology integration.

     

    “These capacities are yet to be built, so for Ghana to really reach that apex to attract capital, it is very important that we build the capacities of people to understand project finance, actual documentation, and the data houses that we need to build to have data sources to prove this work we are doing is very important,” he said.

     

    Mr. Gyimah underscored the role of technology, such as AI, in simulating data and optimising waste management.

     

    “All of these are data-driven; if you mention that you are going to remediate 1.5 metric tons of CO2 and this amount of tons of waste, I need to have data to prove it.”

     

    On waste segregation, he noted, “Waste segregation starts at the source, and there is a need for separate bins.”

     

    He suggested policy initiatives, such as subsidised bins or buyback programmes, to encourage proper segregation.

     

    Jospong’s innovative approaches, he said, included waste segregation, recycling, organic fertiliser production, and transfer loading stations.

     

    “Those investments that we made closer to the people help us to be able to aggregate the waste and with that, we are able to have a first line of treatment which helps in the type of waste that goes to the recovery plant for recycling.”

     

    Mr. Gyimah concluded, “Individuals, governments, and private sectors must work together to reduce carbon emissions. By building capacities and leveraging technology, we can unlock capital and create a sustainable future.”

     

  • SSNIT shifts focus to fixed income for greater stability.

    SSNIT

     

     

     

    The Social Security and National Insurance Trust (SSNIT), the country’s largest institutional investor, has announced a significant transition towards a fixed-income-focused portfolio.

     

    This is set to reshape SSNIT’s investment strategy and create ripple effects across various economic sectors.

     

    Currently, SSNIT’s GHS 16.7 billion portfolio is heavily weighted with 49.3 percent in equities, 34% in alternative investments, and only 16.7% in fixed income.

     

    However, under the new strategy, SSNIT plans to more than double its fixed income allocation to 48.8 per cent while significantly reducing its exposure to equities and alternative investments.

     

    SSNIT Director-General Kofi Bosompem Osafo-Maafo elaborated on the shift during a recent media briefing, stating: “The plan is to reduce our real estate and equity investments, reallocating to fixed income, which offers greater stability. This will better align us with our long-term objectives.”

     

    The long-term strategy aims to boost SSNIT’s fixed income allocation to 60 per cent, reduce equities to 26 per cent, and maintain alternative investments at 14 per cent. T

     

    his adjustment is intended to provide more stability and predictability in returns, aligning with the trust’s long-term financial goals.

     

    Mr. Osafo-Maafo underscored the broader economic benefits of the new strategy, saying: “As we shift towards fixed income, we expect increased stability and predictability in our returns, which will ultimately benefit our stakeholders and align with our mission to secure the financial future of our members.”

     

     

  • Africa offers attractive investment opportunities for Japanese firms, say AfDB leaders.

     

    African development bank

     

     

     

    Africa presents a compelling investment destination for Japanese firms, with high growth potential and the African Development Bank’s strong support to manage risks, African Development Bank Group leaders have stressed at the recent Japan-Africa Business Forum in Tokyo.

     

    “Africa has huge private sector opportunities. The continent offers some of the highest returns globally,” said Prof. Kevin Chika Urama, Bank Group Chief Economist and Vice President, in a presentation highlighting Africa’s abundant renewable energy potential, and the need for strategic investments in green minerals and value addition. “Smart investments in Africa are good business — doing well by doing good,” he stressed.

     

    Dr. Kevin Kariuki, Vice President for Power, Energy, Climate and Green Growth, highlighted Japan’s competitive advantage in geothermal technology. “90% of all the turbines in Kenya are from Japan, starting with Mitsubishi,” he noted. Kariuki also positioned Africa as a solution to Europe’s energy challenges, with planned interconnections to export power and hydrogen.

     

    The forum was organized by the African Development Bank and Keizai Doyukai, the Japanese Association of Corporate Executives, with support from Japan’s Ministry of Finance.

     

    Bank leaders underscored the institution’s commitment to making investing in Africa more attractive. “We have facilities within the Bank to try and de-risk these projects,” said Kariuki, citing the Sustainable Energy Fund for Africa’s (SEFA) support for the Kom Ombo and Kairouan solar projects amid escalating costs.

     

    Kazuko Nagura from Japan’s Ministry of Economy, Trade and Industry (METI) announced plans to hold the third Japan-Africa Public-Private Economic Forum later this year. The event will offer Japanese companies an opportunity to travel to Africa to undertake business development and networking. Nagura also made reference to the ministry’s efforts to support Japanese business ventures in Africa such as theAfDX program and Expo 2025 Osaka, Kansai planned for next year.

     

    During a panel discussion on investing in African startups, Vice President for Private Sector, Infrastructure and Industrialization Solomon Quaynor stressed the potential of the Fourth Industrial Revolution  to drive productivity improvements and deliver services to the base of the pyramid. “The idea is to use technology to increase profitability through efficiency, so you’re delivering value for which all segments of society are actually paying,” he explained.

     

    Quaynor highlighted the Bank’s initiatives to develop Africa’s human capital and startup ecosystem, including partnerships with tech giants: “We have a program with Intel to train nine million Africans in artificial intelligence and a coding for employment program to upskill up to 50 million youth.” He said the Youth Entrepreneurship Investment Banks(YEIBs) will further support tech-enabled companies and enhance the collaboration with & Capital, a new Africa-focused impact fund endorsed by Keizai Doyukai.

     

    Misako Takahashi, Deputy Director-General of the Middle Eastern and African Affairs Bureau at Japan’s Ministry of Foreign Affairs, highlighted TICAD as a platform for co-creating innovative solutions for growth and to discuss Japan and Africa’s shared future.

     

    Yacine Fal, the Special Representative of the African Development Bank’s President to the Africa Investment Forum, showcased the platform’s role as a premier conduit for investment into Africa’s agriculture, energy, transport, healthcare and ICT sectors, among others. She noted the successful participation of Japanese investors and business leaders including those from Keizai Doyukai at the 2023 Market Days held last November in Marrakech.

     

    Keizai Doyukai, and the African Development Bank reaffirmed their commitment to work together to strengthen business ties between Japan and African countries. The two jointly organized the business forum to increase interest in African business and promote a better understanding of the Japanese private sector ahead of TICAD 9.