PAN-AFRICA STATISTICAL REVIEW
Oil and gas sector dominates project finance
2012: a statistical review
• One third of all M&A deals have African acquirers (Chart I)
• •
European acquirers register highest value of transactions in the region over past seven years (Chart I)
Renewable energy absorbs 16% of the project financing directed into the Sub-Saharan energy and natural resources sector (Chart A)
Chart A: Project Finance 2012
Mining (1,496)
Commercial/Industrial (642) Power (254)
Oil & gas-E&P (3,215)
(Total - $11.48 billion) Infrastructure programmes in total accounted for $742 million,
Oil & gas (8,037)
Other infrastructure (305)
(Total - $12.98 billion) 4 ENERGY & INFRASTRUCTURE | SUB SAHARAN AFRICA 2013 “
Statistics provided by Dealogic show that the 2012 project finance market was occupied largely by financings to Sub-Saharan Africa’s natural resources sector and specifically to the oil and gas sector, which accounted for a third of all financings: $8.03 billion of a total of $12.98 billion (Chart A). Within this, 53% of loans funded oil field exploration and development, a third went to gas exploration and development and the rest was largely absorbed by refinery, LNG (liquefied natural gas) and LNG plant projects. This focus on explo- ration has been mirrored by recent oil and gas reserve discoveries on the ground, especially in Mozambique where companies such as Anadarko and ENI have found proven gas reserves of 100tcf (trillion cubit feet).
53% of [project financings] funded oil field exploration and development, a third went to gas exploration and development
Renewable fuel (1,811)
Transport infrastructure (437)
split between health and government infrastructure and transport while the region’s industrial and commercial sectors secured financ- ings of $642 million, primarily to fund processing infrastructure. No- tably on the transport side shipping ports accounted for 59% of financings. One of the more interesting areas in 2012 was renewable energy,
which saw financings worth $1.81 billion – 16% of all project finance agreements – and was largely driven by the construction and devel- opment of wind farms, which absorbed a third of the financing. This comes as no surprise considering the investment drawn to renewable projects in South Africa, under its renewable energy programme, and to Kenya, where developers were working on a range of large wind farm projects a short distance from the capital, Nairobi. The syndicated loan market gives a different picture (Chart B),
with mining players securing $5.93 billion in 2012 while the oil and gas exploration sector secured loans of $3.33 billion and the power sector, raising considerably more funds than from project finance, ab- sorbed $2.04 billion. Raising money through the capital markets is traditionally difficult and 2012 was no exception, with very few deals: only two debt issuances on the international markets, raising $1.74 billion, and nine equity capital markets transactions, worth $239 mil- lion, were closed in 2012.
Mining sector drives M&A market The 12 months of 2012 saw 303 mergers or acquisitions (M&A) completed in the Sub-Saharan energy, natural resources and utilities sectors totalling $17.72 billion with the most activity in the mining sector, which accounted for over half the deals (185 transactions) worth $10.07 billion. In contrast, M&A in the oil and gas sector to- talled $6.99 billion, split between $4.89 billion in the diversified sec- tor and $2.1 billion relating to exploration and development activities (Chart C). Needless to say, the South African market dominated mining M&A
but the 2010-12 period also shows a trend of a growing base level of M&A transactions in East Africa, Central and Middle Africa and Southern Africa (Charts D). In West Africa, which here includes Mau- ritania and Mali, countries such as Burkina Faso have seen a consistent year on year increase in the overall value of deals closed, from two trans- actions in 2005 at $5 million to 11 in 2012 at $55 million – a tenfold
Mining (5,925)
Utility &
energy-electric power (2,042)
Chart B: Syndicated Loans 2012: Borrowers
Oil & gas-field equipment & services (200)
Oil & gas-pipeline (100)
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