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African Energy - Issue 412 - 26/03/2020

Coronavirus impact on Africa’s power sector is limited, so far

The coronavirus pandemic has so far been characterised by the dramatic speed of infection and a rapid escalation of policy responses by governments. While Africa has so far been less affected than Europe, South Africa’s President Cyril Ramaphosa on 23 March announced a 21-day lockdown to begin on 26 March, and it is likely that many more countries will follow. The continent has had at least 2,000 recorded cases, mostly among people travelling from Europe, and almost certainly many more in reality.

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African Energy - Issue 411 - 12/03/2020

Price shock hits African producers already struggling with low demand

The fallout from Saudi Arabia’s 6 March decision to pull the plug on negotiations with Russia to extend and deepen Opec and non-Opec crude production cuts risks dragging Africa’s leading oil exporters into prolonged recession if oil prices do not recover quickly from their new levels of around $35/barrel.

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African Energy - Issue 410 - 27/02/2020

West African oil exports hit by coronavirus effect as Chinese demand falls

West Africa oil exporters are scrambling to deal with a sharp drop in Chinese import demand caused by the coronavirus. China imported around 1.3m b/d of West African crude before the economic jolt caused by the virus. Imports fell to 1.1m b/d in February, causing major disruption to the key market for many sub-Saharan African oil exporters, according to tanker data and crude-loading programmes.

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African Energy - Issue 409 - 13/02/2020

Nigerian electricity regulator acts to rein in distribution chaos

A tumultuous few months in Nigerian electricity distribution that included the Nigerian Electricity Regulatory Commission (NERC) threatening to withdraw the licences of eight of the country’s 11 distribution companies (discos) in October has forced progress on some of the many intractable problems preventing investment in the sector. A clearer and more balanced regulatory framework has been put in place and, with a regulatory order on electricity distribution franchising expected later this month, discos have some options for attracting investment and improving service quality (AE 367/6, 363/7).

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African Energy - Issue 408 - 30/01/2020

Haftar rejects peace efforts, reimposes Libya oil terminal blockade

The warlord Khalifa Haftar’s comprehensive blockade of oil export terminals in eastern and western Libya is an attempt to force his drawn-out siege of Tripoli into an endgame. His price for lifting the blockade is the replacement of both National Oil Corporation (NOC) chairman Mustafa Sanalla and Central Bank of Libya (CBL) governor Sadiq Al-Kabir. He also wants a greater share of oil revenues. Acceding to these demands would hand Haftar control of the two institutions that control the country’s resources and its money. It would confirm his legitimacy and represent the capitulation of the Government of National Accord (GNA). This shift to economic blackmail can be interpreted as a sign of weakness as it confirms the failure of military and political strategies for attaining victory. However, muted international condemnation and growing fatalism among Libya’s oppressed and war-weary people mean the gambit may well succeed.

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African Energy - Issue 407 - 16/01/2020

CFA franc to be replaced by eco, but initial change is largely symbolic

The move by the eight-member Union Economique et Monétaire Ouest Africaine (Uemoa) to end its 55-yearold currency union based on the French-guaranteed CFA franc will have a range of consequences for businesses and political relations. The new eco currency, whose creation was formally announced in Abidjan on 21 December by President Alassane Dramane Ouattara and the visiting French president, Emmanuel Macron, includes some major changes, notably ending control over franc zone institutions by the Banque de France and reducing the guarantee of the French state. But it does not yet represent an economic revolution: the eco’s introduction in the Uemoa will be subject to a steady transition, intended to avoid upsets in a region that has made considerable economic progress in the past decade, but remains prone to security concerns and potentially volatile populations.

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African Energy - Issue 406 - 19/12/2019

Competition heats up for Egyptian gas plant privatisations

The Egyptian government is considering a number of options for the sale of three gas-fired power plants built by Siemens between 2015 and 2018 which together added 14.4GW to the grid. A sale may be negotiated bilaterally or via a more time-consuming competitive auction; options include the eventual floating of a minority stake on the Egyptian Stock Exchange. The newly formed Tharaa sovereign wealth fund is already playing a decision-making role and is likely to retain the state’s long-term interest in the plants.

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African Energy - Issue 405 - 05/12/2019

Libya’s NOC defies uncertainty with bold investment plan

National Oil Corporation (NOC) chairman Mustafa Sanalla has unveiled a $60bn five-year investment plan to increase crude oil production from 1.25m b/d now to 2.1m b/d by 2024 and gas output to 3.5 bcf/d. Speaking at the Libyan British Business Council in Tunis on 26 November, he said that LYD15bn ($10.5bn) would come from state budgets and the remaining 80% from strategic investors.

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African Energy - Issue 404 - 21/11/2019

Petroleum bill set for release as South Africa government mulls gas options

Minister of mineral and energy resources Gwede Mantashe said on 7 November the new draft Petroleum Amendment Bill, which is currently before cabinet, would be released for public comment within the next three weeks. The bill was drawn up following criticism of the previous government’s efforts to lump oil and gas with mining in the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill (AE 379/12).

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African Energy - Issue 403 - 07/11/2019

The United States’ Millennium Challenge Corporation (MCC) on 23 October withdrew $190m of grant funding to Ghana, the same day the government formally began the process of cancelling a concession agreement between the state-owned Electricity Company of Ghana (ECG) and Power Distribution Services Ghana Ltd (PDS). The cancellation follows controversy over the validity of payment securities provided by PDS as part of the transaction (AE 402/10, 398/15).

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African Energy Gulf States Newsletter