The Mauritius Commercial Bank (MCB) Ltd Aims to Help Africa Transition Towards Low-carbon
To limit global warming and mitigate the worst impacts of climate change and climate variability, MCB recognises the need for countries around the world to steadily shift to low-carbon development
PORT LOUIS, Mauritius–(BUSINESS WIRE)–Mauritius Commercial Bank (MCB) Ltd (https://www.MCB.mu), the banking arm of MCB Group, ambitions to become a more prominent player in the African energy landscape, by financing and supporting electrification projects that encourage the use of renewable energy. In this respect, MCB has recently participated in three landmark projects in Ghana, Rwanda and Nigeria. These projects are crucial milestones in the electrification goals of these respective countries and in their transition from fossil energy to more renewable, low-carbon energy sources. Prior to joining those three projects, MCB applied the Equator Principles to proactively identify and mitigate environmental and social risks.
Zaahir Sulliman, Head of Specialised Finance, MCB: “We are proud to contribute to these important electrification goals and the transition to more renewable energy sources”
Make a difference in Ghana
In July, Genser Energy announced it successfully closed an 8-year USD 425m funding package, which will be used to refinance existing debt and finance crucial electrification projects in Ghana. The funds will allow for a 100km natural gas pipeline to Kumasi, Ghana’s largest city, a 200mmscfd gas conditioning plant at Prestea and a Liquid Natural Gas (LNG) storage terminal at Takoradi port. Genser Energy ambitions to achieve net zero carbon by 2035.
As per Genser Energy, the construction of the natural gas pipeline to Kumasi and the gas processing plant in Prestea will have significant economic and environmental benefits not only for Genser but also for Ghana and the West African sub-region. The transaction will support Genser’s diversification from power to the gas midstream sector and mark a significant milestone in its decarbonization strategy to achieve net zero carbon by 2035 whilst contributing significantly to Ghana’s national climate change targets on emission reduction.
The availability of cheaper and readily accessible piped natural gas in Kumasi and the central belt of Ghana via the new pipeline will encourage industries to switch from imported trucked diesel and heavy fuel oil (HFO) to indigenous natural gas as a low-carbon intensive fuel. The pipeline will also support relocation of power plants from coastal regions to reduce line losses and improve efficiency on the national grid. Moreover, the gas conditioning plant will produce cleaner fuels and establish Ghana as a significant producer and exporter of LNGs. Moreover, the gas conditioning plant will produce cleaner fuels and establish Ghana as a significant producer and exporter of natural gas liquids. This demonstrates the potential of natural gas to act as a transition fuel that can help Africa achieve its development agenda.
Supporting Nigeria’s gas-to-power programme
MCB, as co-Mandated Lead Arranger, assisted in structuring and raising USD260MM in debt to fund the completion of the ANOH Gas Processing Plant.
Despite significant untapped reserves, domestic utilisation of gas remains low due to lack of infrastructure. Gas development and infrastructure projects will address this imbalance and result in significantly higher rates of gas utilisation for domestic use.
Assa North-Ohaji South (“ANOH”) is a conventional gas development located onshore Nigeria which will supply AGPC with the feedstock gas and is operated by the Shell Petroleum Development Company of Nigeria. The gas infrastructure development project is one of seven critical gas development projects earmarked by the Nigerian National Petroleum Corporation (“NNPC”) and the Ministry of Petroleum to bridge the demand-supply gap in the Nigerian domestic gas market.
The 300MMscfd capacity ANOH plant, located in OML53 in Imo State, is being built by ANOH Gas Processing Company Ltd (“AGPC”) which is equally owned by the Nigerian Gas Company Limited (“NGCL”) and Seplat Energy Plc. Seplat is already a leading provider of natural gas to Nigeria’s power sector, supplying up to 30% of Nigeria’s domestic grid in 2021.
A prominent player in Rwanda’s Omnihydro project
Last June, the Omnihydro hydroelectric powerplant was inaugurated in the district of Nyamagabe, Rwanda. This project, implemented by Omnicane, a Mauritian company, and financed by MCB, the leading bank in Mauritius, , came to fruition under a Special Purpose Vehicle (SPV) incorporated in Rwanda and operating under the name of Omnihydro Ltd. The facility has one common powerhouse with two different intakes, one on Mushishito river and the other one on Rukarara river. This power plant intends to reduce CO2 emissions by approximately 14,500 tons per year. The hydropower plant is expected to power on average an equivalent of 175,000 homes with clean energy. The small dams constructed on the Mushishito and Rukarara rivers protect communities against floods and droughts, whilst providing more than new 600 jobs during the implementation of the project.
How MCB can help
To limit global warming and mitigate climate change’s worst impacts, MCB recognises the need for countries around the world to transition to low-carbon economies. This is particularly important for Africa, as existing development challenges such as poverty, food insecurity and instability make it the continent most vulnerable to climate change. However, MCB also recognises Africa’s complicated energy requirements and the challenge in balancing economic and social progress and access to energy with climate goals.
Africa has the lowest rate of energy access globally – it is estimated that 600 million people lack access to electricity and more than 930 million lack access to clean cooking fuels. While there has been increased investment in the continent’s vast renewable energy potential, this is insufficient to meet growing energy demands. To achieve the continent’s growing electricity needs and help reach its renewable energy goals, MCB can be a financial partner and arranger of choice.
Commenting on MCB’s strong involvement in these projects and its ambition to accompany African countries’ transition to more renewable energy sources, Zaahir Sulliman, Head of Specialised Finance, MCB, said: “We are proud to be contributing towards Ghana, Rwanda and Nigeria’s universal electrification and their respective objective to drive sustainable development goals of meeting universal energy demand, whilst optimising production, minimising costs, and reducing emissions”.
Mr. Sulliman added: “MCB is aware of its responsibility in the face of the climatic emergency and has already committed to stop financing new coal power-plants and discontinue the trade financing of both thermal and metallurgical coal. We believe that the financing of LPG and natural gas will form part of MCB’s gradual energy transition strategy, which builds on our previous commitment to stop all new financing of coal infrastructure and trade worldwide. Financing more sustainable energy projects is a first step in the right direction and we look forward to continuing to support client projects that drive energy transition through responsible consumption and production in an endeavour to improve living standards”.
Distributed by APO Group on behalf of The Mauritius Commercial Bank Ltd (MCB).
Download image: https://bit.ly/3EVBY4a (Zaahir Sulliman, Head of Specialised Finance, MCB)
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