With new oil and gas production on the horizon for the MSGBC basin in 2024 and beyond, the region is poised to benefit from a robust financial sector and lucrative investment opportunities focused on growing and expanding West Africa’s hydrocarbons sector. Since major discoveries were made between 2014 and 2027, the MSGBC region has emerged as a highly competitive investment destination for large-scale gas projects. Senegal and Mauritania are at the forefront of this revolution with the implementation of regulatory reforms, such as Senegal’s 2020 Gas Code and increased exploration activities driving the gas monetization and exploitation agenda.
Fueling Growth in Oil and Gas
Poised to assist the growth potential of Senegal’s oil and gas industry, brokerage firm Finance Gestion et Intermédiation and investment company Baobab Asset Management launched the Fi Natangué investment fund to provide financing solutions to companies operating in the country’s hydrocarbons sector. The launch comes after Senegal achieved first oil from the Sangomar field in July this year, while the country anticipates first gas production from the Greater Tortue Ahmeyim (GTA) conventional field development in early 2025.
Estimated to hold up to 500 million barrels of oil, the Sangomar field received a substantial investment commitment of €50 million from financial institution the Africa Finance Corporation, which entered into a strategic partnership with the Senegalese government in August last year. The initiative played a pivotal role in propelling the initial development phase of the project towards first oil this year. In addition to bolstering Senegal’s burgeoning economy, the funding served to support the country’s aspirations to emerge as a regional oil and gas industry hub while fostering local employment and enhancing energy security.
Meanwhile, with first gas on track for 2025 – setting the stage for Senegal and Mauritania to become regional natural gas hubs –, the GTA development received the FLNG vessel Gimi in January 2024. Poised to serve the GTA’s FLNG terminal, the vessel was converted from an LNG carrier through a $700 million loan from commercial banks that included ABM Amro, ING, Morgan Stanley and Standard Chartered as well as the publicly funded Bank of Japan.
Poised to support sustained economic growth, Senegal’s Sovereign Fund for Strategic Investments brings together national and foreign investors on strategic partners. The sovereign fund invests directly and indirectly into strategic projects as part of Senegal’s Plan for an Emerging Senegal. In Mauritania, the National Fund for Hydrocarbon Revenues manages revenue from the exploitation of natural resources and serves as an investment fund while stabilizing the energy sector’s role in the economy.
Boosting Infrastructure Through Finance
Leveraging energy investment to foster infrastructure development has opened a number of opportunities for the MSGBC region to boost economic growth. In July 2024, Turkish power producer Aksa Energy – through its subsidiary Ndar Energies – provided a progress update to Senegal’s 225 MW Saint Louis combined cycle gas turbine development, announcing that the project is nearing financial close. The development, design, construction and operation of the $475-million project is being financed by pan-African financial institution the African Export-Import Bank. Due to commence commercial operation by 2026, natural gas to the plant will be supplied from the GTA development. Meanwhile, a 25-year power purchase agreement is already in place between Ndar Energies and Senegal’s state-owned Senelec.
As a burgeoning oil and gas hub, Senegal is expected to benefit significantly from a MoU signed in May 2024 between financial institutions the Eastern and Southern African Trade and Development Bank (TDB) Group and West African Development Bank. The MoU aims to foster collaboration in the financing of trade and development in Senegal, with a specific focus on energy, infrastructure, education and financial institutions. Senegal became a member of the TDB Group in 2022, opening the country up to impact-focused trade and development financing from the institution to further economic and trade cooperation in the specified sectors.
Energy financing and sovereign wealth fund opportunities will be explored at next year’s MSGBC Oil, Gas & Power conference and exhibition. The event will host panel discussions exploring the crucial role a robust financial sector can play in helping the MSGBC region leverage investments in energy project developments for energy security.
