Wednesday, October 5, 2022
Global Affairs

NATO Turns to Africa to Fill Natural Gas Gap

Africa is endowed with vast natural gas reserves but lacks the infrastructure to export it

To move away from depending on Russian energy, Europe is increasingly turning to Africa for its natural gas imports.

The invasion of Ukraine by Russia has harmed gas supplies in Europe, as Russia is the primary provider of the product.

“Germany and Europe must now quickly make up for what they have missed over the last 20 years,” Stefan Liebing, chairperson of the German-African Business Association, said in a recent press release.

He advised Germany’s Economy Minister Robert Habeck to travel to African countries such as Algeria, Nigeria, Egypt and Angola, which could help free Europe from its dependence on Russian gas.

Algeria is the 10th-largest gas producer globally.

Meanwhile, 450 MW Temane gas-fired project has been launched in Mozambique by the country’s President Filipe Nyusi

IFC is providing debt financing for the US$652 million project, with FMO and Emerging Africa Infrastructure Fund (totaling US$254 million), US International Development Finance Corporation (DFC) (about US$192 million), and OPEC Fund for International Development (OPEC Fund) (US$50 million). The Multilateral Investment Guarantee Agency (MIGA) has offered private equity investors up to $251 million in political risk insurance.

The Temane project includes a 450 MW gas-fired power plant and a liquefied petroleum gas (LPG) and light oil production plant.

It also includes a 563 km long power transmission line between Temane and Maputo worth US$200m.

Construction started in June 2021 and commissioning is scheduled in 2024.

The project is developed by a consortium between the Mozambican state-owned power utility Electricidade de Moçambique (EDM), Globeleq, an Africa-focused independent power producer owned by CDC (70%) and Nordfund (30%), the UK-based infrastructure developer eleQtra and the South African energy and chemical group Sasol.

Gas will be supplied by Sasol and the Mozambican national oil and gas company Empresa Nacional de Hidrocarbonetos (ENH) from the PSA gas field and electricity will be sold to EDM under a 25-year power purchase agreement (PPA).

 

 

 

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