South Sudan Oil and Power explores the best ways to close the oil and gas financing gap in Africa
As South Sudan seeks to attract foreign investment to boost activities across the hydrocarbon sector, the South Sudan Petroleum and Power Conference and Exhibition (https://bit.ly/3A1hgvV) – currently underway in Juba, highlighted how the country and the African continent can bridge its growing investment gap and maximize the development and exploitation of oil and gas for energy security and economic growth.
During a panel discussion entitled “Capital Quest: Tackling Financing Challenges and Barriers to Doing Business”, sponsored by Stanbic and moderated by Hugo Hill, Managing Director, TRM Risk Management, speakers including Admassu Tadesse, Chairman Emeritus and Group MD, TDB; Rene Awambeng, Global Head, Client Relations, The African Export-Import Bank (Afreximbank); Matt Rodgers, Chief Commercial Officer, Chemex Global, Inc.; Ngosong Fonkem, lawyer, Page Fura PC; Ryan O’Grady, interim CEO, Kush Bank; Victoria Otieno, Managing Director of Alpha Commercial Bank, discussed the best financial solutions needed to enable the country to achieve new innovative oil and gas developments.
Commenting on how South Sudan and Africa can position itself as an energy investment destination, Tadesse said, “We tell producers to show us how innovative your projects are and we and other investors will come to the party. African energy-producing countries need to solve the conditions for micro-finance in their own environment in order to be able to attract financing from external parties.
Commenting on Africa’s ability to fund its own energy revolution, Awambeng said, “As Africans, we should stop looking for funding elsewhere. Africa has the experience, the resources and the funding to develop its own resources. Today, our continent is a net exporter of raw materials and a net importer of refined materials that we buy at three times the price to meet our energy needs. Western investors are abandoning resource financing in Africa for various reasons and African companies are left with nothing but to support themselves. Promoting intra-African trade will be key to addressing this investment gap. As Africans, we must seize the opportunity to invest in our own borders.
Awambeng added, “We don’t think the challenge is funding, we need to work together to find innovative solutions and see how we can transform our resources. Why can’t we build refineries and import refined products. We believe that we can raise funds to finance our resources and that is why after COP27 we decided to develop the African Energy Bank. This is why we are calling on African producers to register in November so that we can work together to develop the energy market in Africa. We are finalizing the terms of the creation of the bank. Stakeholders in South Sudan and across Africa need to create the right kind of catalysts that will attract investors.
With sanctions disrupting investment in South Sudan’s downstream sector, Rodgers also urged local investors to collaborate in building infrastructure such as refineries and stop relying on external funding.
O’Grady of Kush Bank, added that “we need to do more now. We need to reach out to our government partners and improve the level of communication. When I talk about competitiveness, it is important to talk about local SMEs. People don’t lend to them because they are “too high risk”. As national banks, we have a responsibility to take that risk and make that investment. This is why for the next five years; Kush focuses on how to grow the local SME industry. If we don’t, how do we mature the industry? »
Otieno added that “there are a number of challenges facing this country and the government has done everything possible to try to alleviate these challenges. The central bank was actively involved in market intervention. The challenge is that there is not enough liquidity to drive this exchange rate down. We need to work together and push liquidity into the market. We have an erratic currency. When you’re in the oil and gas business, you tend to have ups and downs. I am happy that Afreximbank was able to step in and help stabilize, providing a facility for the flow of funds to be consistent in the market. When we examine how local content players operate, we recognize a problem of lack of track record. We need to come together both locally and internationally and build a fund to improve the Letter of Credit quota and as such improve trade.
Advocating for increased development and implementation of African financial solutions to accelerate energy developments – and thanking Afreximbank for signing a Memorandum of Understanding with the African Petroleum Producers Development Organization of the African Energy Bank energy – NJ Ayuk, Executive Chairman of the African Energy Chamber joined in the discussion, saying that “it is you South Sudan and Africa that have the solution to enable the continent to meet its financing gap and avoid going to international markets in search of financing. By stimulating local solutions, we will be able to develop our own oil and gas developments on our terms. »
Distributed by APO Group on behalf of Energy Capital & Power.
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