Genser Energy has achieved financial close for an eight (8)-year $425Million funding package to in part, finance the following:
- a 100 kilometre natural gas pipeline to Ghana’s second largest city, Kumasi
- a 200Million standard cubic feet per day (200MMscf/d) gas conditioning plant at Prestea, Ghana
- and a Natural Gas Liquid (‘NGL’) storage terminal at Takoradi Port as a major step in Genser’s
The funds, which comprise of a syndicated senior loan facility of $325Million and a $100Million mezzanine loan facility, will also be used to refinance existing debt.
Concurrent with the fundraising, Genser signed an offtake agreement with Trafigura for 100% of NGLs, primarily propane, butane and ethane, as well as Liquified Natural Gas (‘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.
“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”, Genser explains. “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 (HFO) 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)”.
The senior loan facility was financed by a consortium of regional & 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.
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.
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.
Genser’s new lenders include Société Générale, Mauritius Commercial Bank and Ninety One, as well as Trafigura as an investor and strategic partner. Among the company’s old and existing lenders are Standard Bank of South Africa, Absa Bank, Barak Fund SPC Limited and the Development Bank of Southern Africa..