Sub-Saharan Africa projects and trends

Energy and infrastructure 2016 is the fourth edition of our sector specific guide to the legal markets of Asia-Pacific, Central and Eastern Europe, Latin America, the Nordic and Baltic region and Sub-Saharan Africa.

In the last six months our team of legal journalists in London, Hong Kong and New York have interviewed lawyers, industry figures and in-house counsel active in the relevant sectors to source their opinions on law firm performance and the state of the energy and infrastructure sectors in their jurisdiction and regions, and what they see as the main talking points, challenges and areas of activity.

From these conversations and their extensive research, the IFLR1000 team in London has summarised, by country or sub-region, the main trends and developments across Sub-Saharan Africa below.

Energy and infrastructure 2016 is the first research project to utilise IFLR1000's new Deal Database, a fully searchable database of significant deal records from over 120 countries. Our team has selected some of the most significant Sub-Saharan Africa energy and infrastructure projects which emerged from this research period, and you can view these data records below.

Energy and infrastructure project records 

Trends and developments 


Very few projects have surfaced in Angola in 2015, due largely to the economic crisis the country is facing because of the global fall in the price of oil. The situation culminated in Moody’s downgrading Angola’s bonds in 2016 to B1 with a negative outlook, citing the poor financial position of the country because of its dependence on hydrocarbons as the key factor behind the decision.

Barring a significant increase in the oil price soon, Angola is in jeopardy of defaulting on its debt, and the government is in discussions with the World Bank about what measures it can take.

Angola’s state oil company Sonangol announced earlier this year it has net debt of over $7 billion, and the company is under extreme pressure to refinance its loan agreements. The troubled business is currently in the construction phase of its $2 billion green-field oil refinery near Lobito, a significant project that is being financed and constructed by a Chinese consortium.

The general slowdown of the Chinese economy, historically a great investor in the Angola, has resulted in no noticeable decline in Chinese inbound investment in Angola.

Angola is also facing a foreign exchange liquidity crisis; the Bank of America, shortly followed by Rand Merchant Bank, opted to stem the supply of US dollars to the country in order to defend the local currency, the Kwanza, from devaluation. Inward foreign exchange injections have also been limited but, conversely, private investment laws have changed relaxing restrictions on foreign-owned entities from investing in the country.

As the government seeks to diversify its economy away from its dependence on oil and gas, it has commissioned a handful of infrastructure developments. These include the $500 million Mota-Engil developed expansion of the 124 km Dundo-Lucapa motorway, and the development of its pedestrian bridge network, which is being financed with a $219 million loan from BNP Paribas.

Following its decommissioning in 2014, the ill-fated Angola LNG project, led by Chevron, has been recommissioned, and exports are due to recommence mid-way through this year.

A possible solution that is being suggested as the answer to the country’s energy and economic problems is the development of the solar energy sector, a space that the government is yet to utilise to its full potential.

John Crabb – Journalist EMEA


Central Africa

Boasting two out of the 10 poorest countries in the world, Central Africa is among the continent’s least developed regions and nowhere is Sub-Saharan Africa’s infrastructure gap more evident. In most of the French-speaking Central African countries, no more than 25% of the populations have access to electricity - despite relatively high reserves of minerals, oil and natural gas, and a potential for renewable development.

Several of the jurisdictions in Central Africa have had, or are having elections in 2016, including Central African Republic, Chad, Congo Brazzaville, Equatorial Guinea, Gabon, São Tomé and Príncipe and, most notably, the Democratic Republic of Congo (DRC) where constitutional issues and electoral laws have pushed back what is likely to be a very interesting debate.

Low commodity prices and reduced income from oil exports have destabilised much of the world, and Central Africa is no exception. GDP growth has fallen across the board, and this year credit agency Moody’s downgraded Gabon, and then the DRC twice in the space of two months. As a result there has been very little new money invested in the mining sector.

Despite being among the richest countries in the world in terms of resources, the DRC is at the bottom of the pile in terms of wealth, and its political instability and corruption is among the worst. Like others in the region, including Cameroon and Gabon, the DRC has turned to hydroelectricity as a source to provide power for its 67 million population. The proposed 42GW Grand Inga hydroelectric dam complex on the Congo River will be, if it is ever completed, the largest hydro dam in the world, although a large portion of its output is to be sold to South Africa. Other notable hydro-electric developments in the region include the Ruzizi III hydropower plant in DRC, which will also provide 147MW of power to Rwanda and Burundi in the east; Cameroon’s 200MW Memve’ele hydropower station and $1 billion Nachtigal Falls 420MW dam; and, the proposed 115MW Ngoulmendjim project in Gabon.

Although less prevalent than hydro projects, there is some solar activity throughout the region, including 100MW of development in feasibility stage in Cameroon, and the 60MW Djermaya Solar project just north of Chad’s capital, N’Djamena.

Cameroon has the highest proven natural gas resources in Central Africa. Gas shipping company Golar has developed a floating liquid natural gas (FLNG) project just off its coasts to utilise approximately 500 billion cubic feet of natural gas reserves from the offshore Kribi fields, to be exported to global markets. Also in Kribi is a recently constructed 216MW natural gas-fired reciprocating engine power plant.
Also rich in natural gas reserves is the tiny state of Equatorial Guinea, and there too an offshore FLNG terminal is being developded. Costing several billion dollars, the Fortuna FLNG project has been largely developed by Ophir, and is expected to be exporting gas by 2019.

Although much of Central Africa’s resources have gone into developing the energy sector, there are non-power related infrastructure projects under development in the region, including port developments, fertiliser projects and a football stadium in Gabon, an international airport to serve Cameroon and a PPP (public-private partnership) funded deep-water port in Congo Brazaville.

John Crabb – Journalist EMEA


East Africa

Stretching from Eritrea in the North down to Mozambique in the South, the region of East Africa is one of the least developed in the world. Of the twenty poorest countries in the world by GDP, four of the top 10 are situated in East Africa and a further six make up the top 20. To put this in context, the gas rich jurisdiction of Mozambique is the only country in the region where more than 25% of the population have access to electricity, and this collection of countries have some of the highest poverty and lowest life expectancy rates of anywhere in the world.

Economic difficulties are not the only issue the region has to contend with. Last year’s election in Burundi span out of control and another civil war looks inevitable; Eritrea’s migrant problem is growing rapidly and as many as 5000 flee the country every month; a drought in Ethiopia is threatening to send the country back in to poverty after years of promising economic growth; violence and the threat of civil war In Mozambique is causing thousands to escape to neighbouring Malawi, putting unwanted pressure on the already impoverished nation; brutal clashes in South Sudan have been declared a humanitarian emergency, and disorder as a result of multiple general and presidential elections in the region this year look set to instil general unrest across the board. None of these factors make the underdeveloped region of East Africa a particularly attractive place for foreign investors at present.

Energy production and infrastructure development are priorities for the governments of East Africa. Kenya has developed its Vision 2030 Programme and is investing heavily in solar, wind and geothermal generation; Uganda has initiated a Get FiT (feed-in tariff) programme that has introduced hydro to the area, and across the region there are several renewable energy projects in various stages of development.

Few East African states have any oil reserves. Uganda has the greatest proven resource and Ethiopia has a limited quantity, while Soma Oil & Gas in Somalia continues to search its Gulf territory in hope of discoveries. As a result, the oil crisis has not had as detrimental an effect on these states as their neighbours in the West, and reduced import costs have lowered several countries’ deficits.
Historically East Africa has low reserves of natural gas, but this could be about to change. Huge quantities of LNG been discovered of the coast of Mozambique and Tanzania in recent years, and once the race to extract the reserves comes to a head, the injection that both countries will get from the gas-hungry international market should have a significant ripple effect on the energy and infrastructure markets of the entire region.

A proposed intergovernmental union between the six countries of the Great Lakes region, with related currency and trade unions, would have a significant influence on economic success, and could be extended to include other countries.

Excluding the dynamic hub countries of Kenya, Mozambique, Tanzania and Uganda, which are discussed at greater length in their country-specific chapters in this guide, project development in East Africa is limited. Ethiopia and Rwanda are the most active countries, and there is some development activity in Madagascar, Malawi and South Sudan.

In renewables, a notable joint venture between the Democratic Republic of Congo, Rwanda and Burundi is the 145MW million Ruzizi III run-of-the-river hydroelectric plant, which will cost around $600 million to complete and supply sustainable energy to the three countries using a PPP (public-private partnership) model.

Rwanda is keen to develop renewable energy. Hydropower is currently its biggest source and there are more projects in the pipeline, including the Nyabarongo I power station. Away from hydro there is also the Fortum 80MW peat-powered power station, the Symbion 50MW gas-powered power plant and the Kayonza Solar power station in their early stages.

A particularly interesting development in Ethiopia is the Corbetti geothermal power project, which was well publicised after President Obama’s state visit to the country. The two stage multi-billion dollar project is set to provide as much as 1000MW of power to the grid, and will be the largest geothermal project on the continent once operational.

A significant infrastructure development, again in Ethiopia, is the proposed 550 km Horn of Africa pipeline, which will run from Awash in the centre of the country to Damerjog in Djibouti, transporting diesel, gasoline and jet fuel. The project is likely to cost $1.55 billion, and will sustain growth in the region once completed in 2018.

Transport is another sector where all governments in the region are keen for their countries to advance, both for commercial and public use. There are a large scale standard gauge railway developments planned through Kenya, Uganda, Tanzania, Rwanda and South Sudan and the port towns of Mombassa and Lamu in Kenya, and Dar-es-Salaam in Tanzania are competing to be the preferred choice for cargo movement in the region. In 2015, Ethiopia was also the first country in Sub-Saharan Africa to open an urban light rail service in its capital, Addis Ababa.

Mining projects under development in the region include a potash mine in Ethiopia, Ambatovy’s $8 billion nickel and cobalt project in Madagascar and the Kayerekera uranium mine in Malawi.

John Crabb – Journalist EMEA



Ghana is currently one of Sub-Saharan Africa’s most active jurisdictions in terms of energy and infrastructure projects. The government is confronting the country’s crippling energy crisis (much of the population has limited or no access to power) head-on and made energy development a large part of its state of the nation address for 2016.

This ambition is reflected in the number of large projects underway in the jurisdiction, particularly in renewable energy and downstream oil and gas production, as well as in the area of supporting infrastructure. A review of the PPP (public-private partnership) law is also underway, as the government looks to kick-start foreign investment in infrastructure development, with plans for water treatment plants and motorway developments in progress.

The precedent set by the 340MW Kpone IPP (independent power producer) thermal plant in 2015 has encouraged the development of other large power projects. Endeavour’s Ghana 1000 gas-to-power project, so far costing more than $1 billion, is set to produce around 1000MW of combined cycle power and includes a purpose-built LNG import terminal. A second project located in Aboadze, the 190MW combined cycle gas-fired Amandi IPP project, at present has a cost around the $540 million mark and will produce power for hundreds of thousands of households.

The renewable sector is burgeoning, solar in particular. Notably, Blue Energy is looking to build a 155MW project at Nzema, utilising feed-in tariffs set under the 2011 Renewable Energy Act for the first time.
The popularity of gas-to-power projects continent-wide has led to an increase in demand for LNG, of which, alongside oil reserves, Ghana has an abundance. Oil multi-nationals ENI and Vitol have invested $7 billion in the OCTP (Offshore Cape Three Points) exploration project, which will produce oil to export, and gas to supply Ghana’s domestic plants. To the west of this field is the Tullow-operated TEN Project, which aims to be producing oil by August 2016 but hit a stumbling block when the government entered into a maritime boundary dispute with Côte d’Ivoire. Drilling has been temporarily stalled until an agreement can be reached.

The major LNG import terminal at Tema has been underway for several years, with Quantum Power acting as lead developers. Once completed the project will be able to process and deliver more than three million tonnes of LNG each year. It is set to cost more than $500 million and is being implemented on a BOOT (build-own-operate-transfer) basis. A second oil and gas free port valued at $695 million is also being constructed at Atuabo, in the Gulf of Guinea, to serve the county’s upstream gas and service companies.

John Crabb – Journalist EMEA



With GDP at around 5.6% in 2015 and forecasted to rise to 6% in 2016, Kenya is one of Sub-Saharan Africa’s success stories. This can be largely attributed to successful investment in the country’s infrastructure and its diversified economy, which is not – like many African countries - reliant on oil revenues.

As a net importer of oil, with little in the way of oil and gas development, low commodity prices have had a positive impact on Kenya’s economy, and as a result the national deficit has decreased significantly over the last year. Good financial decisions, steady rates of inflation, tax breaks and investment incentives have ensured Kenya is not been deemed a risky places to invest, with Moody’s affirming its B1 sovereign rating and stable outlook in early 2016. An election scheduled for 2017 has the potential to disrupt the current stability, and well-publicised terrorist attacks still hang over the country and its tourism industry.

Renewable energy is at the core of Kenya’s Vision 2030, the state programme designed to unlock the country’s economic, social and political potential. The country was once reliant on fossil fuels, but in recent years has installed several renewable projects in line with the programme’s aggressive targets. One example, the Lake Turkana wind project, now contributes 17% of the power the country consumes. Several are in commission, such as a 100MW development at Kipito and the 50MW Limuru wind farm.

Other burgeoning renewable areas include solar, with developments in progress including the $140 million project at Kesses; Geothermal, with the $200 million Akiira One geothermal plant and projects at Menengai underway; and, biomass, with a development at Naivasha set to be the largest plant in Africa.

A significant venture introduced by the government, under the auspices of Vision 2030, is the Lamu Port and Lamu-Southern Sudan-Ethiopia Transport Corridor, a series of projects and developments that will link the coastal town of Lamu with parts of South Sudan, Ethiopia and the north west of Kenya. The major projects include airports, oil pipelines, roads, railways, resort towns, and a major new port development at Manda Bay that will service the whole region. A $2 billion 960MW coal power plant is also being developed at Lamu, as well as a major railway redevelopment between Nairobi and Kampala.
Another major infrastructure development underway is the Second Nyali Bridge to link Mombassa and Mombassa Island, which is the first PPP (public-private partnership) to be undertaken in Kenya since the establishment of the PPP Act in 2013.

In the retail sector, Garden City, a new mall, was completed in 2015, and similar retail complexes - Two Rivers and The Hub - are currently underway. Both developments include retail, office, residential and recreational space, and Two Rivers is set to be the largest such complex in Sub-Saharan Africa, outside of South Africa.

Looking at energy and infrastructure project-related law, an amendment to Kenya’s constitution in 2013 devolving certain powers to regional state government, is causing new problems for developers and disrupting some projects. Road and motorway developments and power transmission lines that cross state lines, for example, are being affected by a lack of accountability and government-to-government risk has manifested. In the mining sector, an area where Kenya has fallen behind its neighbours, the government has overseen legislation changes that should trigger FDI once implemented.

John Crabb – Journalist EMEA



Mauritius itself is not a particularly active market for energy and infrastructure projects, however the island plays a vital part in channelling funding to the African continent for the huge raft of projects taking place there. Its tax treaties and agreements with countries like India make it a vital cog in the project finance machine.

For Mauritius law firms this means that the bulk of their work in these sectors generally takes the form of corporate and investment fund advice, setting up SPVs, holding companies and other structures for potential investors. In line with this the market is a mix of domestic firms and offshore brands like Appleby, Bedell Cristin and Conyers Dill & Pearman. In addition a number of local firms have also established connections with Pan-African networks, allowing the latter to offer their clients synchronised Mauritian law advice.

Though domestic projects do, by comparison, take up much less time than international funding and corporate structuring matters, there are some notable developments to report.

The country has long targeted an increase in renewable energy generation as a key development aim, its reliance on fuel imports has acted as a driver along with environmental concerns. In 2009 the country introduced its long term plan to boost production by 2025 and in 2015 the country established a new Renewable Energy Agency whose role will be to encourage and promote the use of renewable energy in the country.
One interesting development in this field was an initial agreement signed between the country and Australian energy company Carnegie Wave Energy to develop commercial wave power plants on the island. While this may not be a huge contributor to the island’s overall energy mix, it does show the country’s ambition to embrace new technology.

Elsewhere another notable project in recent years has been the improvement of the country’s road network. The Road Decongestion programme is a series of projects and proposed projects which includes the improvement of existing roads such as the M1 and M2 routes and the construction of new ones. Begun in 2009, the estimated cost of the upgrade work is $1 billion and the island has made good use of public-private partnerships (PPP) to bring it to fruition.

Sam Duke - Editor


Recent events in Mozambique are threatening to send the country into economic turmoil and activity in the once booming energy and infrastructure sectors has stalled. Economic strain - GDP is falling - has caused the government to halt new investments, and investors are increasingly looking elsewhere for bankability on the continent.

The country is facing political and economic problems. Since elections in late 2014 tensions have risen once more between the incumbent Frelimo party and the opposition Renamo. High-jacking and raids are increasing in number in the central provinces surrounding Tete, and thousands have fled to nearby Malawi. Tourism is an area where the country has potential due to its plentiful coastline, but its prospect as a source of revenue and investment hinges on the peaceful conclusion of civil unrest.

The threat of a return to the civil war of the 1980’s is only one of the factors limiting FDI. Since the discovery of vast oil and gas fields of its coast, Mozambique has invested hugely in the sector but the recent deterioration of oil barrel prices has taken its toll on two multi-billion dollar LNG projects that at one point looked set to kick start the economy.

The projects, developed by Anadarko and Eni respectively, have both been put on hold while the companies are forced to readjust the cost of the projects to avoid losses on a massive scale. Although both are suspended rather than cancelled, it is clear that the market has changed dramatically and neither company will be rushing into any decisions on how to move forward. Notably both have been selling gas assets. New laws passed by the government when the economic outlook was significantly better to aid FDI are now also becoming stumbling blocks.

A lot of Mozambique’s infrastructure is linked directly to the two projects in the Rovuma Basin, and is hinging on the successful completion of both. Countless roads, bridges, ports, railways, processing plants and airports are all in limbo because of a lack of finance.

Recently a further crisis has hit the shores of Mozambique and caused the IMF to cancel a recent visit and suspend the country from receiving funding. It also caused Moody’s to downgrade Mozambique’s credit rating to Caa. The crisis stems from bonds, to the value of $850 million, raised in 2013 to allow the government to purchase a fleet of tuna fishing ships. These tuna bonds were reportedly used to finance the country’s navy and not a fishing fleet as suggested. As a result tuna revenues are faltering and return on the bonds has depreciated significantly. Unknown to investors or the IMF until after a restructuring deal for the initial loans had been agreed, it has also surfaced that Credit Suisse has helped the state borrow several billion of additional dollars in recent years. Public debt is currently sitting at over $11 billion, far higher than was thought previously.

There are some projects that have been completed in the last year that offer hope for Mozambique’s energy and infrastructure market. A $275 million 175MW gas fired IPP (independent power producer) project was inaugurated at Ressano Garcia in February 2016, and the 275MW coal fired power station at Moatize is still under way and due to be operational in 2018. The country continues to explore for oil and gas within its maritime borders and there is evidence that an attempt is being made to utilise renewable energy in the 30MW Mocuba solar photovoltaic power plant as well as through discussions for the feasibility of hydro-electricity.

Despite the fall in commodity prices, Kenmare Resources continues to develop a titanium mine in the vast resource of Moma, and graphite stocks are also being extracted by Syrah Resources in the Cabo Delgado province of Northern Mozambique.

John Crabb - Journalist EMEA



After Libya, Nigeria has the second largest oil stocks in Africa and the tenth largest in the world, but it also has the largest natural gas reserves on the continent, vast quantities of solid minerals and an abundance of fertile land that it is only now beginning to develop.

As Africa’s most populous country and, according to official government’s figures, its largest economy, resource rich Nigeria feels the infrastructure gap more than any other country on the continent. Newly elected Muhammadu Buhari put infrastructure at the top of the bill during his presidential campaign, and the retired major general is decidedly anti-corruption in his outlook, an important factor as the country looks to move on from Goodluck Jonathon’s regime.

According to the World Bank, at 2.11% Nigeria’s GDP grew at its lowest recorded rate in the last quarter of 2015, and it is clear that the country needs to move away from its heavy reliance on hydrocarbons and diversify its economy if it is to sustain its ever growing population and rescue its economy.

Not helping the country’s economic woes is its ongoing energy crisis, an issue leaving much of the country in darkness. Recent gas-to-power developments have significantly changed the makeup of the energy market, none more so than the recently completed $876 million Azura-Edo IPP (independent power producer) open-cycle gas power station. As well as providing 450MW of energy to the grid, the pathfinder project has paved the way for several similar projects in the country, which now have the templates and contractual documents in place to allow for a much smoother development process. Similar projects in various stages of the pipeline include the Ikot Abasi 228.5MW IPP project, the 495MW CPG-Okilja IPP project, and the OMA power project, a three phase green-field 1080MW gas-fired power plant in Abia State.

More traditional oil and gas projects are still in development. The long awaited LNG project at Brass Island has been delayed after shareholder exits and technology reviews and, despite the ongoing crisis, Chevron continues to search for crude oil in the country and has a $1.2 billion drilling project in operation.

As the economy looks for ways to diversify supply, the renewable sector is beginning to open out in Nigeria, particularly in solar. Developers are looking to get around the complex regulatory frameworks that are in place, and most projects are still in conception. An example is the IFC and Alten led 120MW solar photovoltaic development in Kogi State, which is the IFC’s first solar project in the country.

Nigeria has an abundance of infrastructure developments in the pipeline, some under construction and some in the early stages of conception. Most projects are in the transport sector. Perhaps the most prominent is the Second Niger Bridge, an 11.9 km bridge across the River Niger that will link Asaba, Delta State and Western and Northern Nigeria with Onitsha and the Niger Delta for the first time. Also at the top of the government’s priority is the Lagos-Ibadan expressway, a NGN170 billion redevelopment of one of the country’s most widely used roads.

Other major developments include integrated railway systems, a cable car transport system in Lagos, and a proposed deep sea port at Ibom with related locomotive links. The Abuja Centenary City is an ambitious project to develop a smart city in the vein of Dubai near Abuja, with Abu Dhabi developer Eagle Hills.

Corruption remains a problem in Nigeria and reports in 2015 demonstrated the extent to which it is afflicting the oil industry. Nigeria has been losing billions in oil revenues for a long time and following Buhari’s election, the Nigerian National Petroleum Corp (NNPC) announced that $16 billion of funds has disappeared without trace. Considering that despite low oil prices, revenue from this sector still accounts for around 35% of GDP and two thirds of Central Bank funding, this is no paltry sum.

Another factor preventing energy and infrastructure development in the region is the security threat, with terrorist cell Boko Haram creating problems in the north. Recent reports say that Buhari’s government is making inroads, but the group still remain a threat to Nigeria’s prosperity.

John Crabb – Journalist EMEA


South Africa

Until around a year ago, South Africa had the strongest economy on the entire continent but a combination of factors have seen the rate of growth slow significantly. A recent statement from the World Bank, forecasting South Africa’s GDP growth at 0.8 percent for 2016 - the lowest in nearly six years - attributed the difficulties to the country’s political instability (President Jacob Zuma has been accused of corruption and his decision to name three different finance ministers in the space of four days saw the Rand go into freefall), low commodity prices, drought created by El Niño and, most notably, large energy and infrastructure gaps across the country.

The mining sector in South Africa is under increasing pressure. Excess supply has caused commodity prices to tumble and left the sector in distress. Industries like steel, titanium and platinum are all suffering, and increasingly shareholders are looking to divest or refinance as deal-hunting private equity funds snap up cheap distressed assets. Further to this, recent amendments to the draft mining charter cites that mines must always be at least 26% owned by BEE (black economic empowerment) certified owners, even if this share had been previously sold on. The dispute, referred to as ‘once empowered, always empowered’, is being heard in court, and it has been suggested that this interpretation of the law could bring the South African mining sector to its knees.

In an effort to curb the increasing energy shortages facing South Africa, the government has introduced several programmes aimed at accelerating sustained levels of private investment and funnelling private sector expertise into the grid. To date the largest and most successful of these projects has been the renewable energy independent power producer procurement (REIPPP) programme, which, now in its fourth phase, has a target of achieving 3725MW of interrupted renewable energy supply by 2030. Incorporating wind, solar, thermal, biomass, biogas, landfill gas and hydro, the programme has so far contributed significantly to both the grid and the economic development of the sector, and has now been replicated in other countries across the continent.

As part of the REIPPP programme there have been a wave of renewable projects begun in the last year, with several reaching financial close and nearing construction. Perhaps the most popular source for development is solar power. Spanish company Abengoa has developed three concentrated solar power projects (CSPs) in the Northern Cape Province: Kaxu Solar One (in operation), Khi Solar One (in operation), and Xina Solar One (under construction). Further projects include the Kalkaar 150MW CSP, the Kotulo Tsatsi 150MW CSP, the Rooipunt 150MW CSP and Total’s Mulilo Prieska photovoltaic solar plant. The recently closed Kathu and Redstone thermal projects will also add another 100MW each when fully operational.

There is also a lot of activity in wind power, with several developments including Mainstream’s Kohbab, Loeriesfontein and Noupoort farms set for construction this year with a combined output of 360MW. Enel Green Power’s 82.5MW Pulida plant and the 140MW Roggeveld wind facility are also among the most notable. Other noteworthy renewable projects include the proposed 16.5MW Mkuzi biomass project, which will run on sugar cane and is set to be the first biomass power project in South Africa.

Another similar government tariff scheme that has been put in place is the Coal Baseload IPP (independent power producer) procurement programme. Developed in the same vein as the REIPPP programme, it has been established to stimulate interest in investment into the development of an initial 1000MW of South African, and 600MW of cross-border, coal-fired power. Among the proposed projects is Thabametsi, Exxaro’s 630MW power station in the Limpopo province.

Also in the pipeline, and set to become the next government flagship strategy once the REIPPP programme ends, is a programme to procure 3126MW of baseload power from gas to power resources through the development of two major facilities that will allow for efficient importing of LNG. There is also a programme in place to develop nuclear power, with plans afoot to add to the existing power plant at Koeberg with as much as 9600MW of nuclear power generated by as many as eight plants over the next 15 years. Several countries are said to be involved in the development stages of the procurement plan, with Russia controversially reported to be frontrunners.

Away from energy and there is also a telling gap in South Africa’s infrastructure. Areas currently under development are the transport sector, including road and railways. Water supply is in great need of rejuvenation and social infrastructure, in general, needs to be updated. The government has recently spent billions of rand procuring several new locomotives for both public and commercial use, and is investing heavily in rolling stock projects across the country. Major road developments are also underway, most notably the ZAR22 billion redevelopment of the Gauteng Freeway linking the economic heartlands of the country.

John Crabb – Journalist EMEA


Southern Africa

Removing Angola from the equation, as its oil reserves make it something of a wildcard in Southern Africa, the region is markedly different to its northern counterparts. The influence of South Africa is telling in the sparsely populated counties of Namibia and Botswana, as well as Lesotho and Swaziland. A lack of oil reserves in the region has ensured that energy infrastructure developments are limited outside of South Africa, and a large proportion of projects are developed by South African companies to help combat its own energy crisis.

The most severe and lengthiest El Niño in nearly forty years has had a dramatic impact on the region’s weather patterns, and the lowest rainfall on record since the early eighties has brought on extreme drought. Not only has this drought had a telling effect on harvest levels, maize in particular has suffered substantially, but the regions hydro-electric output has been brought to a standstill. This is most apparent in Zambia’s Kariba Dam where water levels are running at about 15% of total capacity.

In Namibia steady growth and a burgeoning mining sector have led to greater energy requirements, and there is a great need to develop the sector that is failing to meet demand and keep prices low for consumers. Several international oil exploration companies have invested in offshore block licenses, in the hope of finding reserves in the realms of northern neighbour Angola.

Locked within the borders of South Africa, Lesotho and Swaziland are very reliant on their neighbours’ economy for energy and infrastructure growth. South Africa’s renewable energy independent power producer procurement (REIPPP) programme dominates the Southern African energy and infrastructure market, and outside of this, and other South African government programmes there is little in the way of significant project development.

One of the largest developments in the region is the regeneration of the Morupule coal mine in Botswana, where as part of the National Development Plan the government is refurbishing the existing 132MW Morupule A coal-fired plant and designing and constructing the 600MW Morupule B expansion and the 300MW at Morupule C expansion, as the country looks to close its reliance on imported power.

Outside of South Africa, renewable energy is in infancy in Southern Africa. Namibia has approved its renewable energy policy and Diaz Wind Power is set to become its first green energy project, it is also is in the process of attempting to install its first solar plant at Omburu. The Batoka Gorge hydroelectric power station, straddling the Zambezi River borders of Zambia and Zimbabwe, could potentially provide 2400MW of power if it passes regulatory approval.

Although no oil has yet been discovered off the coast of Namibia, the Orange Basin Kudu gas field has so far shown an estimated 1.3 billion cubic feet of natural gas reserves, enough to last over 20 years of extraction. Although not yet commissioned, the Kudu gas field is set to provide LNG for the Kudu Power Station, an 800MW combined cycle gas turbine power station just north of the Southern city of Oranjemund. In Walvis Bay an LNG platform and 250MW gas-to-power project also exploiting the gas field was also planned as a short term solution the country’s energy deficit, although the future of this project is uncertain.

John Crabb – Journalist EMEA


Like most countries in Sub-Saharan Africa, Tanzania suffers from an energy deficit and has been making moves to increase domestic production. Recent discoveries of natural gas off the coast of near Mozambique’s Rovuma Basin are estimated to contain upwards of 55 trillion cubic-feet of gas reserves and further discoveries in February 2016 promised a further 2 trillion cubic-feet of onshore resource. The Central Bank claims this abundance of gas could propel the country’s economic growth forward significantly.

The gas discoveries have led the government into negotiations for developing a multi-billion dollar LNG processing plant with Royal Dutch Shell, Statoil, Exxon Mobil and Ophir. At present, the deal is in limbo, with investors weary of making large commitments to a gas project with commodity prices so low. If the project is completed it should stimulate the sector significantly, and a recently resolved land acquisition issue is a cause for optimism.

As well as its plentiful gas supplies, the country has large supplies of biomass, hydro, coal, geothermal, solar and wind resources that the country is attempting to utilise. Plans are in place for 210MW Kilwa gas plant, the 240MW Kinyerezi II gas plant, and the 300MW Kiyerezi III gas plant. In renewables, which make up a large part of activity in the country, EcoEnergy’s $380 million ethanol and power project and the $100 million 40MW solar photovoltaic project at Rumuruti show how the government is trying to light up rural areas by harnessing solar power.

Although mining has largely fallen flat in recent times, a recent discovery of rare earth deposits was made in 2012. Similarly, infrastructure is not top of the agenda for the Tanzanian government and there are only a handful of projects in the pipeline. One notable project is an intermodal rail terminal in Kibaha district which should drastically increase the nearby port’s efficiency and allow Tanzania to establish itself as a regional trade hub.

Tanzania received a boost in May 2016 when Uganda choose to run its oil exports transport corridor through its borders to the port of Tanga, choosing the route over an alternative running through neighbouring Kenya to the port at Tema.

Tanzania recently promulgated the Petroleum Act 2015 as an update to the Petroleum Exploration and Production Act 1980 and the Petroleum Act 2008. The act updated legislation for upstream, midstream and downstream operations in the country, and importantly separated the petroleum revenues of mainland Tanzania and the archipelago of Zanzibar.

John Crabb – Journalist EMEA



At one point Uganda was one of the world’s fastest growing economies, and after discoveries of at least 3.5 billion barrels of oil between 2010 and 2012 it looked likely to continue that way. However, the sharp drop in oil price has seen major developments like the Russian oil refinery development project at Haima become significantly less attractive investments, and coupled with a decreased demand for the country’s other exports its GDP has grown at a slower rate than in previous years, at 5.8%.

Although sluggish, the oil and gas market is still in motion and a major pipeline development to transport crude oil to the Indian Ocean for relocation is nearing construction phase, after a route through Tanzania was chosen at a recent summit.

In renewables, Uganda is the key driver in the East African GET FiT (feed-in) Program. The programme has been rolled out in the country and the first phase, to develop several hydro power plants with an aggregated total of 125MW, has begun, and further phases, focusing on solar and biomass, are planned.

Renewables are a large part of Uganda’s energy output, and current projects are set to make up as much as a third of overall installed capacity. In hydro-power, several large projects are under construction, including the 600MW power station at Karuma; the 188MW Isimba hydro power project; a proposed 250MW project at Bujagali and a further 600MW station at Ayago is also in conception stages. Solar power is also being development, an example is the recently opened solar photovoltaic project in Soroti which has added 10MW to the grid.

There are several infrastructure developments currently under way in Uganda with transport in particular is very active. For example, the long delayed Chinese-funded, road developments between Kampala, Jinja and Entebbe. In the railway sector a further Chinese funded development is set to connect much of East Africa with a standard gauge railway line. An initial route between Kampala and South Sudan has recently been approved and further lines have been conceived. Other projects include the major redevelopment of the international airport at Entebbe, irrigation schemes, schools and the improvement of health infrastructure nationwide.

A notable political development in 2016 saw longstanding president Museveni Musaveni charged with treason earlier this year after he was deemed to have rigged the 2016 election. The outcome of this situation was still to be resolved at the time of publication.

John Crabb - Journalist EMEA


West Africa 

Covering the area between Mauritania to the north down to the Nigerian border with Cameroon, the Sub-Saharan region of West Africa contains an array of countries of varying economic stability.
The region is a mix of countries boasting strong levels of growth and diversified economies, like Ghana, Benin, Cote d'Ivoire, Senegal and Togo, and those that have problems with poverty and crippling fiscal debt, like Guinea, Mali and Sierra Leone.

Over the last two years large parts of Western Africa faced an enormous social and economic setback as the most recent Ebola crisis tore through Liberia, Guinea and Sierra Leone, making it as far as Mali and Nigeria. Large volumes of financial resources that had been set aside for infrastructure development were absorbed into treating the virus, setting each of the affected areas back significantly. Foreign investment into the West of Africa has varied from country to country and Ebola has not helped to those affected, nor have the recent bouts of terrorism seen in Mali, Cote d'Ivoire, Nigeria or Niger.

Western Africa boasts an abundance of natural resources, and importantly has significant proven oil and liquid natural gas (LNG) supplies in Nigeria, Ghana, Cote d'Ivoire, Mauritania and Benin. The majority of the development in the oil and gas sector has taken place in Nigeria and Ghana to date, the countries with the largest supply, but the necessary infrastructure is now growing in stature in the others despite the global downturn and a recognised need to maintain a diverse economy.

A trend not just seen in West Africa but across large parts of the continent is the rise of gas-to-power as an alternative method of stemming increasing energy requirements of growing populations. The rising energy demands of Cote d'Ivoire in particular provide a good example of this. where one project being developed by Endeavour Energy is the Songon combined cycle thermal power plant project, alongside an integrated LNG import facility and floating storage and regasification unit. The first phase of this will be 375MW but could extend to as much as 1200MW in the future.

Gas rich Mauritania is also developing a project to utilise resources from its Banda gas field, a 180MW gas fired power plant and a 120MW extension are underway, as well as the necessary transmission infrastructure to distribute the power as far as Senegal and Mali.

A similar project is being developed by the government of Benin, the 360MW Genesis power project will provide 30% of the country’s total energy supply. In Senegal, the IFC and OPIC helped the government to re-develop Cap Des Biches; a heavy fuel, oil-fired thermal power plant that contributes 52.9MW to the grid, but interestingly has been redesigned with the option to convert to LNG in the future.

The West African renewable sector is underdeveloped in comparison to other parts of Sub-Saharan Africa but this is changing. Cote d'Ivoire in particular is keen to develop hydro-electricity and one project, the Soubre hydropower plant will add 275MW once completed. In Mali a 42MW hydro project is being developed by Eranove will be installed by 2020. In Sierra Leone the Bumbuna hydropower plant is being expanded to a capacity to 400MW.

Solar power is in its infancy in West Africa but is an area that is being developed, particularly in Ghana where Blue Energy are developing a 155MW solar photovoltaic plant at Nzema. West Africa’s largest wind farm is nearing completion in Katsina, Nigeria, but will provide only 10MW of power to the grid.

Despite the global commodities super-cycle coming to an end in 2015, many of Western Africa countries continue to exploit their plentiful natural resources and mining activity has been more prevalent than in other regions of Sub-Saharan Africa. ArcelorMittal is in the process of developing an iron ore mine and infrastructure to transport the product in Liberia - a project that was beset by problems and stalled for over 10 years.

Guinea has long relied on its mining industry, particularly gold, and recent years have seen it suffer considerably as investment levels have dropped. The country has continued to develop in the sector however and last year saw an increase in activity on recent years. The Rio Tinto development Simandou in particular is set to have a major impact. Still in its feasibility stage, the project will unearth some two billion tonnes of iron ore and could make the country one of the largest exporters in the world. Guinea is also keen to utilise its bauxite supply, and is developing mines at Boffa and Sangaredi.

A growing population has fuelled the need to plug West Africa’s infrastructure gap, and there are projects underway across the entire region to develop roads, railways, airports, sea ports and bridges, as well as social infrastructure like hospitals, universities and housing projects. One noteworthy project is the West Africa rail loop, known as Blueline, which will connect Benin, Burkina Faso, Cote d'Ivoire, Niger, Nigeria and Togo, and is set to boost inter-regional trade. French company Bollore is developing the project and intends to list it on the Paris stock exchange, but has faced problems with the Benin-Niger leg of the route, which will overlap with a separate development, the Africarail project. Other major rail developments are being developed in Guinea to support its mining sector. There are several options currently being discussed to link pits and ports in Sangardei, Kamsar, Kindia, Conakry, Fria, Simandou and Morebaya.

Notable developments include port projects at San Pedro in Cote d'Ivoire, Togo’s Lomé Container Terminal, the largest investment in the country’s history, and the new international airport project in Dakar, Senegal.

John Crabb – Journalist EMEA


The problems facing the Zambia have been growing at a stark rate over the last year, and the mix of political, economic and environmental factors having a detrimental effect on the country makes it a troubled time for much needed energy and infrastructure development.

There are two major problems affecting Zambia: the increased availability of copper globally has driven down the price of its main export; and the worst drought in living memory has not only ruined crop output but disabled the hydro-power dependent countries power grid, forcing Zambia to import expensive electricity. The Kariba Dam, one of the world’s largest, which generates almost half of the country’s power, is running at dangerously low levels and may stop operating entirely in 2016.

The fallout of these factors has been grave. Zambia was enjoying a period of economic growth of around 7% in the early years of this decade; it is now languishing at 3%. Unless the situation can be rectified the forecast remains negative. The international ratings agency Moody’s has acted accordingly, downgrading the country at the beginning of 2016 from B2, to B3 and altered the outlook from stable to negative.

To plug Zambia’s energy gap, the government continues to exploit its number one resource, hydroelectricity, despite the problems that it is facing from drought. Working with its counterparts in Zimbabwe, the government is developing the Batoka Gorge Dam, a proposed 1600MW hydroelectric power station on the Zambezi River that will alleviate power shortages, but is being hotly contested by conservationists. The 120MW Itezhi Tezhi hydropower project on the Kafue River recently went online, and the Western Power Company is developing a 60MW run-of-river hydroelectric power station at Ngonye Falls. There is also a redevelopment of the Kariba Dam in the pipeline, which is deteriorating rapidly as it matures.

The government is also looking away from hydro power as it seeks to diversify its energy production. One touted option is geothermal, which has significant potential and is being explored by local company Kalahari GeoEnergy. Another alternative to meeting the base load requirements is coal, and Maamba Collieries are developing a fully integrated coal and power project consisting of an initial 300MW coal fired power station and related infrastructure, which reached financial close in July 2015.

Traditionally a huge part of Zambia’s income, copper mining has taken a significant hit in the last 18 months and there is little in the way of new money or projects, most in fact are looking to divest and the sector is in freefall. In March 2016, however, Mopani Copper Mines announced a $1 billion investment in to the construction of three new mines in the area, offering some hope.

Although infrastructure development is largely focused on the energy, there are other projects that are progressing, particularly in the road transport sector. The Chinese funded $418 million rehabilitation of the roads on the copperbelt is one example, and the nearly compete 175 km stretch between Mansa and Luwingu is another. Also in transport, there are plans underway to develop several new standard gauge railway systems linking the mining provinces and trade corridors.

John Crabb – Journalist EMEA