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Yesterday, the African Development Bank (AfDB) signed two key agreements to further boost energy access in Madagascar. The contracts were signed by Rindra Hasimbelo Rabarinirinarison, Madagascar’s Minister of Economy and Finance, and Kevin Kariuki, Vice President for Power, Energy, Climate and Green Growth at the AfDB. The first one covers the $118m Power Transmission Network Reinforcement and Interconnection Project in Madagascar Phase 2, or PRIRTEM-II. The scheme notably comprises the construction of a 135 km, 220 kV double-circuit interconnection line with a capacity of 300 MW between the Tana Sud 3 (TS3) and Vinaninkarena substations. It also involves the construction of the TS3 220/90/20 kV and Vinaninkarena 220/63/20 kV transformer substations, and the electrification of 19 villages to electrify about 1,000 households. The second one is even more significant because it consists in the execution of project agreements for the 205 MW Sahofika Hydropower Project. The facility will be Madagascar’s biggest hydroelectric station upon completion and will generate hundreds of millions of dollars of savings on fuel costs by displacing expensive thermal power generation. While a pre-feasibility study was done in the 1980s, it is only in 2015 when the Government of Madagascar launched an international tender for the project that its plans were put back in the table. The new $825m facility will be built on a Build Own Operate Transfer (BOT) basis by a consortium gathered into Nouvelle Energie Hydroélectrique de l’Onive (NEHO) and led by the Eiffage group. Upon completion, it will be operated and maintained by the Eranove group after its connection to the grid of JIRAMA, Madagascar’s national electricity company. The African Development Bank (AfDB) is acting as Mandated Lead Arranger. Full details on the Sahofika Hydropower Project are available in the “Projects” section within your Hawilti+ research terminal.
Africa Oil Corp.’s acquisition of a 50% interest in Petrobras Oil and Gas B.V (POGBV, now known as Prime) in 2020 for $520m is paying off. The Canadian independent has just become cash positive in Q3 2021, reporting a net cash position of over $15m. The performance was made possible thanks to AOC’s exposure to some of Nigeria’s biggest deep-water fields. When the Canadian independent acquired a 50% interest of POGBV last year, it benefited from an indirect 8% interest in the Chevron-operated OML 127 and 16% indirect interest in the TotalEnergies-operated OML 130 offshore Nigeria. These blocks contain the Agbami, Akpo and Egina deepwater fields, three of the continent’s biggest producing assets. Source: Africa Oil Corp. AOC started earning dividends from Q1 2020 onwards and benefited this year from the strong rebound in oil prices and the gradual lifting of OPEC quotas. Its average daily working interest production stood at 27,500 barrels of oil equivalent per day (boepd) in Q3 2021, generating two dividends worth $112.5m from Prime during the period. Since completing the acquisition of a 50% shareholding in Prime in January 2020, Africa Oil has already received nine dividends from Prime for a total amount of $350m. As a result, AOC was able to significantly reduce its corporate debt facility to only $23m, up from $141m at the start of the year. The company’s stock performance echoes that of its balance sheet. Its shares were trading at CAS$2.07 this morning, up from CAD$1.23 at the start of the year. Details on Africa Oil Corp’s projects across Africa along with the company’s financial and operational performances are available in the “Companies” section within your Hawilti+ research terminal.
