Ghana: Genser secures $425m from Standard Bank, Ninety One, Barak, others
Genser Energy has closed an eight-year $425 million funding package. The funds, which comprise a syndicated senior loan facility of $325 million and a $100 million mezzanine loan facility, will be used to refinance existing debt and finance the next phase of expansion projects including:
– a 100km natural gas pipeline to Ghana’s second largest city, Kumasi;
– a gas conditioning plant at Prestea, Ghana;
– and a natural gas liquid (NGL) storage terminal at Takoradi Port.
The senior loan facility was financed by a consortium of regional and commercial international banks, development financial institutions, and funds: Standard Bank of South Africa, Absa Bank, Société Générale, Mauritius Commercial Bank, Ninety One, Barak Fund SPC Limited and the Development Bank of Southern Africa. The mezzanine loan facility is provided by Trafigura, Barak Fund SPC Limited and the US-based fund Trilinc Global Sustainable Income Fund Master Ltd.
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.
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 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 natural gas liquids (NGLs).
Concurrent with the fundraising, Genser signed an offtake agreement with Trafigura for 100% of NGLs – primarily propane, butane and ethane as well as LNG – to be produced from the gas conditioning plant in Prestea. In addition, Trafigura participated in Genser’s mezzanine loan facility and provided additional funding to build increased storage capacity at the proposed Takoradi NGL Terminal.
Genser Energy was advised on this transaction by Northcott Capital Limited as financial advisors and Clifford Chance LLP as legal advisors. The senior lenders were advised by Trinity International LLP (legal), Advisian – Worley Group (technical) and Indecs Consulting Limited (insurance). Hogan Lovells acted as legal counsel to the mezzanine lenders.
Baafour Asiamah-Adjei, Genser’s president and CEO stated, “This transaction underscores the hard work and considerable dedication by the management, employees and stakeholders of Genser to make it an attractive and highly valued investment. I would like to thank our existing lenders (Standard Bank of South Africa, Absa Bank, Barak Fund SPC Limited and the Development Bank of Southern Africa) who have shown considerable support and commitment to Genser over many years. I am also delighted to welcome our new lenders Société Générale, Mauritius Commercial Bank and Ninety One, as well as Trafigura as an investor and strategic partner for Genser.”
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