African Infrastructure Investment Managers (AIIM) has acquired minority interests in gas assets in Nigeria majority-owned by Savannah Petroleum Plc. This comprises a 20% stake in Seven Uquo Gas Limited, the entity that holds a 40% participating interest and a 100% gas economic interest in the Uquo gas field located in South-East Nigeria and a further 20% stake in Accugas, the integrated processing and distribution infrastructure for Uquo gas. AIIM purchased the interests from Savannah Petroleum Plc, which owns the remaining 80% of each company.
AIIM, one of Africa’s largest and most experienced infrastructure-focused private equity fund managers and a member of Old Mutual Alternative Investments (OMAI), invested US$54 million of equity into the transaction through its flagship pan-African infrastructure fund, AIIF3.
Accugas has a 200 mmscf/d gas processing capacity plant and a pipeline network of over 250km. The investments will enable the company to continue to support critical power plants that generate more than 10% of Nigeria’s on-grid power supply as well as other leading industrial offtakers.
AIIM’s West African Director Olusola Lawson, said: “This deal firmly supports AIIF3’s investment strategy, which targets significant influence investments across the power, transport and midstream energy sectors - three focus verticals across sub-Saharan Africa where AIIM sees the greatest disconnect between the demand for critical infrastructure and available capital for these projects. In Nigeria, estimated peak energy demand is estimated to be over 20,000MW, but this is only met with less than 5000 MW of peak supply. This highlights the power demand gap on the national grid, which is partially due to the unavailability of gas to some of the existing generation plants. AIIM’s investments will help to bridge this gap, creating positive impact outcomes for businesses, communities and individuals on the ground.”
Andrew Knott, CEO of Savannah Petroleum, said: “We are very pleased to be working with AIIM, as they have an impressive track record in the African power sector. The gas to power sector in West Africa is primed for considerable growth over the coming years, so we believe that both Accugas and Uquo offer investors exposure to a fast-growing economy in need of additional power supplies. Both AIIM and Savannah are fully aligned and remain focused on delivering sizeable growth and cash flows at these high margin assets.”
AIIM is pleased with the deployment of AIIF3 to date, with two-thirds of the fund already committed to a diversified portfolio of assets across the thermal power, renewable energy, ports & logistics and airports sectors. This portfolio of assets provides the fund with exposure to operations across 13 African countries. AIIM has concluded nine other investments through the AIIF3 portfolio, including Starsight Power Utility, a leading off-grid energy company in Nigeria, Albatros Energy, a thermal power IPP in Mali, DSM Corridor Group, a bulk handling facility in Tanzania, and BBOXX a next-generation utility platform company.
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