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Balancing the ‘E’ and ‘S’ in Environment, Social and Governance (ESG) crucial to sustaining liquidity and resilience

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Loan Market

The loan market had a challenging 2021, with volumes in the sub-Saharan African market falling to just $28bn, in 110 deals, from about $40bn in each of 2020 and 2019

JOHANNESBURG, South Africa, July 13, 2022/APO Group/ — 

By Miranda Abraham, Co-Head: Loan Syndication at RMB in London (www.RMB.co.za)

Sub-Saharan Africa’s loan market had a slow start to this year but is showing resilience and is set to continue to grow, offering favourable opportunities for the region’s sovereign and corporate borrowers as well as for investors.

The market dynamics are being shaped by global geo-political and macro-economic factors, particularly the ongoing war in Ukraine and rapidly rising inflation and interest rates in advanced markets. They are shaped too by the dynamics between the private loan market, and the public bond markets.

The loan market had a challenging 2021, with volumes in the sub-Saharan African market falling to just $28bn, in 110 deals, from about $40bn in each of 2020 and 2019. Initially growth appeared to be picking up this year. However, Russia’s invasion of the Ukraine cast a pall over markets globally, amidst high levels of uncertainty and supply chain disruptions which forced central banks to act aggressively to attempt to contain inflationary pressure.

The first four months of 2022 saw volumes of $5.4bn in 35 deals in the sub-Saharan African loan market. Borrowers and potential borrowers who had become accustomed to more than a decade of low interest rates became reluctant to commit, as the environment became more hawkish. However, many have now realised that interest rates are likely to go only one way and that’s up. It is increasingly evident that borrowers need to take advantage of any opportunities to tap the market sooner rather than later.

The private loan market still offers borrowers the flexibility to customise their loans in ways that the public markets cannot

Some borrowers were waiting early in the year to refinance existing loans in the belief there was no pressure, and they could wait and see. However, the deteriorating global environment has underlined the fact that there is never going to be a perfect time to launch a loan into the market – and that it’s worth taking the gap when you can.

At the start of the Russia-Ukraine crisis some borrowers turned to their banks for bridge finance and underwritten loan financing, as an alternative to the bond market. That helped to sustain the resilience in the loan market, at a time when levels of uncertainty were high, and the bond market was almost closed to emerging market issuers. The bond market for sub-Saharan issuers has had sporadic windows for issuance but is still not the easiest to navigate in challenging times. In February, RMB led a successful $750m Eurobond issue for Bank of Industry, Nigeria’s largest development finance institution, just before the onset of the Russia-Ukraine crisis. And then in April, RMB led the issuance of the South African Sovereign’s $3bn bond.

However, the private loan market still offers borrowers the flexibility to customise their loans in ways that the public markets cannot. And it provides a useful gateway especially for those borrowers who have yet to build a track record that would enable them to tap the public market at attractive rates. The loan market has remained incredibly resilient despite a tough environment. One challenge it is facing, however, is that tenors are being stretched to unprecedented levels. Sovereigns are now looking to do 7-10 year financing, where only a few years ago Kenya was doing its first three year issuance. In debut deals, shorter tenors may well make for more successful execution of deals. That is especially so given that many investors in this market are reluctant to lend for more than 3-5 years, so the more borrowers try to stretch the tenors, the smaller the pool of liquidity available to them.

One of the themes that is increasingly shaping liquidity conditions in the market is the growing importance of ESG (environment, social and governance) for investors. There is some tension between the approach of advanced market investors and the needs of developing markets borrowers. Many African economies are underpinned by energy products such as oil and gas, on which communities are heavily dependent. Consequently, full, immediate compliance with the ‘green’ environmental standards imposed by advanced country financiers would undermine these countries’ development.

For sub-Saharan Africa, and for emerging markets more generally, the ‘social’ in ESG is just as compelling a need as the “E” in the short to medium term.  And that raises the question for investors of what the right thing is to do in relation to countries which are in desperate need of industrialisation and economic empowerment and are being hardest hit by the fallout from the Russia-Ukraine crisis and its impact on food and fuel prices.

The market has begun to see a trend of addressing the ‘S’ as well as the ‘E” in ESG in Africa. Working with clients and investors to strike that difficult balance will be key to sustaining liquidity and resilience in the loan market.

Distributed by APO Group on behalf of Rand Merchant Bank.

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RIOT Network and MediaTek collaboration expands digital access in South Africa through innovative, community-driven Wi-Fi solutions

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MediaTek

RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities

JOHANNESBURG, South Africa, November 22, 2024/APO Group/ — 

MediaTek (www.MediaTek.com), a global fabless semiconductor company powering nearly 2 billion connected devices a year, and RIOT Network (https://RIOT.Network), a community mobile broadband provider in South Africa, have announced the successful integration of Mediatek’s Filogic 830 (https://apo-opa.co/3CIbkNl) chipset into RIOT’s second-generation CROWDNet Core Nodes.

The successful deployment of the CROWDNet nodes has enabled RIOT Network to achieve its aim of offering uncapped internet at an affordable price of R99 per month, and to do so profitably. To date, RIOT Network, in partnership with Sonke Telecommunications, has leveraged the nodes to connect more than 800 households and 5000 users in Olievenhoutbosch to uncapped Wi-Fi services.

RIOT Network aims to make fast, unlimited Wi-Fi services accessible for people in townships and underserved communities. Its CROWDNet Nodes, enable an innovative model for deploying user-operated network infrastructure. Community members serve as operators of some of the core network devices to earn a share of the fee from neighbours who use the service.

With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity

CROWDNet powered by MediaTek Filogic 830 brings affordable, last-kilometre broadband to communities where it is not commercially viable to deploy towers or fibre. The MediaTek Filogic 830 is a high-performance SoC for routers, repeaters, access points and mesh networking devices. The SoC enables device makers to build-in powerful applications based on an energy-efficient, Wi-Fi 6-ready platform.

“The Mediatek’s Filogic 830 chipset delivers a unique balance of high performance and cost-efficiency, allowing us to keep operational costs low while maximising network reliability and speed,” said Jarryd Bekker, CEO at RIOT Network. “This combination of affordability and sustainable business growth is pivotal to our vision of expanding digital access in underserved communities. Our work in Olievenhoutbosch near Centurion demonstrates the power of reliable, affordable internet, creating new opportunities for economic and social engagement.”

“With each new connection, RIOT Network is highlighting the role of innovative fixed-wireless solutions in extending broadband access and improving digital inclusivity,” said Rami Osman (https://apo-opa.co/4ghZBUn), Director for Business Development, MediaTek Middle East and Africa. “We look forward to supporting RIOT in building a future where high-quality internet is accessible and impactful for all.”

Distributed by APO Group on behalf of MediaTek Inc

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African Energy Chamber (AEC) Endorses Inaugural Congo Energy & Investment Forum, Catalyzing Growth in the Republic of Congo’s Energy Sector

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African Energy Chamber

The African Energy Chamber proudly supports the inaugural Congo Energy & Investment Forum, scheduled for March 25-26, 2025 in Brazzaville

BRAZZAVILLE, Republic of the Congo, November 21, 2024/APO Group/ — 

The African Energy Chamber (AEC), as the voice of Africa’s energy sector, proudly supports the inaugural Congo Energy & Investment Forum (CEIF), set to take place in Brazzaville on March 25-26, 2025. Unveiled during African Energy Week: Invest in African Energies in Cape Town by the Republic of Congo’s Ministry of Hydrocarbons, this milestone event signals the nation’s commitment to strengthening its role as a key energy player on the continent, while showcasing a range of investment opportunities. 

Under the leadership of Hydrocarbons Minister Bruno Jean-Richard Itoua, the Republic of Congo has emerged as sub-Saharan Africa’s fourth-largest oil producer, with anticipated production of 280,000 barrels per day (BPD) by the end of 2024 and ambitions to reach 500,000 BPD within three to five years. Building on this momentum, the CEIF will highlight innovative projects and foster strategic partnerships that enhance investment, drive economic growth and position the Congo as a leader in Africa’s energy expansion.

Meanwhile, Société Nationale des Pétroles du Congo (SNPC), led by CEO Maixent Raoul Ominga, is spearheading the Congo’s energy growth. SNPC holds a majority stake in the Mengo Kundji Bindi II permit, with 2.5 billion barrels of estimated oil potential. The company is developing the site through 13 wells, 3D seismic data acquisition, and the construction of six production platforms. 

We are honored to secure the Chamber’s endorsement for this pivotal forum

With the Chamber’s official support, the CEIF is set to attract government leaders, C-suite executives from major IOCs and energy experts, who will offer critical insights into Congo’s oil, gas and energy sector developments. The country is overhauling its gas sector to unlock 10 trillion cubic feet of resources through a comprehensive Gas Master Plan and new Gas Code that introduces favorable fiscal terms and enables small-scale project development, as well as large-scale, integrated gas megaprojects like Eni’s Congo LNG and Wing Wah’s Bango Kayo. 

“The Congo Energy & Investment Forum marks a major milestone for the country, amplifying its strategic energy initiatives and showing industry stakeholders that it is serious about advancing its energy sector. We look forward to supporting this forum, which promises to connect investors, drive impactful partnerships and elevate the Congo’s position within Africa’s energy sector,” says NJ Ayuk, Executive Chairman of the AEC.  

“We are honored to secure the Chamber’s endorsement for this pivotal forum, which, through its vast network and influence, will help attract key stakeholders and decision-makers to the event. Together, we aim to highlight the immense potential of the Congo’s energy sector, foster strategic partnerships and drive transformative investments that contribute to sustainable growth across the industry,” notes James Chester, CEO of Energy Capital & Power, organizers of the CEIF.   

This premier forum provides a unique platform for connecting local and international investors with high-impact opportunities across a diversified range of energy projects, paving the way for collaborations that drive growth and transformation. The AEC’s endorsement underscores its commitment to fostering strategic partnerships, sustainable investment and regional cooperation, aligning with its broader mission to make energy poverty history across the continent by 2030.  

As the energy industry continues to serve as a critical pillar of the Congolese economy and a catalyst for sustainable development, the AEC remains dedicated to supporting initiatives like CEIF that foster progress, investment and partnerships across the African energy landscape. 

For more information, please visit www.CongoEnergyInvestment.com

Distributed by APO Group on behalf of Energy Capital & Power.

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Any Successful African Energy Policy at Conference of the Parties (COP) or Anywhere Must Have Oil and Gas at its Core (By NJ Ayuk)

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Conference of the Parties

Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels

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JOHANNESBURG, South Africa, November 21, 2024/APO Group/ — 

By NJ Ayuk, Executive Chairman of the African Energy Chamber (www.EnergyChamber.org).

I believe the ultimate responsibility for getting there is ours and no one else’s. Yes, we need partners to walk alongside us, but the success of our energy movement rests on African shoulders.

To begin with, I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals.

This will be particularly important in COP29 in Baku. It is imperative that African leaders present a unified voice and strategy for African energy transitions. We must make Africa’s unique needs and circumstances clear and explain the critical role that oil and gas will play in helping Africa achieve net-zero emissions in coming decades.

I would encourage African leaders to talk about the need for financing, as well, to make it possible for us to adopt renewable energy sources and set up the necessary infrastructure. Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels.

Africa’s governments have a role to play in a successful African energy movement as well.

Because Africa’s energy industry still can benefit greatly from the presence of international oil companies, our government leaders need to approve contracts with oil and gas companies promptly instead of allowing red tape to delay projects after discoveries are made.

And, they need to offer the kinds of fiscal policies that allow oil companies to operate profitably in Africa. In turn, that will help those companies generate revenue, create jobs and business opportunities, and foster capacity building.

I also would encourage governments and civil societies to reward companies that exemplify positive behavior. Let’s incentivize the kind of activities we want, from creating good jobs and training opportunities to sharing knowledge.

I would love to see African energy stakeholders speaking in a unified voice about African energy industry goals

And there’s more.

We in Africa must work together to create more opportunities for women to build careers in the oil and gas industry at all levels. Our energy industry can’t reach its potential to do good when half of our population is left out. Our progress on behalf of women has not been great—We need to do better, and we need to act quickly.

How the world can support

Now, I mean it when I say Africans are responsible for building the future they want. But, I would love to see Western governments, businesses, financial institutions, and organizations support our efforts.

How? They can avoid demonizing the oil and gas industry. We see it constantly, in the media, in policy and investment decisions, and in calls for Africa to leave our fossil fuels in the ground. Actions like these, even as Western leaders have pushed OPEC to produce oil, are not fair, and they’re not helpful.

I also would respectfully ask financial institutions to resume financing for African oil and gas projects and stop attempting to block projects like the East African Crude Oil pipeline or Mozambique’s LNG projects.

Please understand that with the war in Ukraine, the energy crisis in Europe, and the energy poverty facing our continent, our countries, like many others, are simply choosing the paths they believe are most likely to help their people.

You know, people for years have accused me of loving oil and gas companies more than Africa. The opposite is true. In my frequent travels around the continent, I’ve observed far too many young people with little in the way of opportunities.

I know our young people have aspirations for a better future. I know they have big dreams. And, I know that future is nearly within their grasp.

A thriving, strategically managed energy industry can make it possible for many of these young people, whether it leads to good jobs or it fosters the kind of economic growth that creates jobs in other fields. Even if we only get the lights on in their communities, we’ll be giving our young people hope and improving their chances of realizing their goals.

This is what drives me, the idea that with our ongoing efforts and determination, our young people can realize meaningful opportunities. I encourage each of you to work with us at the African Energy Chamber, in a spirit of cooperation and mutual respect. Together, we can build the kind of African energy movement that our continent, our communities, and our young people need and deserve.

Distributed by APO Group on behalf of African Energy Chamber.

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