Genser Energy has successfully secured a loan of $425 million to develop a gas pipeline project in Ghana.
The loan will be paid within a period of 8-years.
The fund, which comprises of a syndicated 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 by the company.
The projects to be financed with the facility includes a 100 kilometer natural gas pipeline to Ghana’s second largest city, Kumasi from the Western region; a 200mmscfd gas conditioning plant at Prestea, Ghana and a Natural Gas Liquid (‘NGL’) storage terminal at Takoradi Port as a major step in Genser’s decarbonization strategy to achieve net zero carbon by 2035.
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 gas conditioning plant will produce cleaner fuels and establish Ghana as a significant producer and exporter of Natural Gas Liquids (NGL).
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.
It will also help in providing cheaper and readily accessible piped natural gas in Kumasi and the central belt of Ghana through the new pipeline which will encourage industries to switch from imported diesel and Heavy Fuel Oil (HFO).
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 NGL.
Concurrent with the fundraising, Genser signed an off-taker agreement with Trafigura for 100% of Liquified Natural Gas (LNG), primarily propane, butane and ethane 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.
The senior loan facility was financed by a consortium of regional and commercial international banks, development financial institutions, and funds comprised of 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.
Genser Energy was advised in this transaction by Northcott Capital Limited as financial advisers and Clifford Chance LLP as legal advisers. 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 Chief Executive Officer 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”.
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