Hogan Lovells has announce that it has advised Barak Fund and TriLinc on an eight-year USD425m facility with Genser Energy Ghana (“Genser”). The 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 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.
Laurie Hammond, partner at Hogan Lovells says: “We are delighted to have been involved in this significant infrastructure deal for Ghana and West Africa, having worked with lenders on funding into Genser Energy Ghana, a market leading and innovative African energy business, since 2017. We would like to take this opportunity to congratulate all involved on this successful closing”.
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 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.
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).
Concurrent with the fundraising, Genser signed an offtake agreement with Trafigura PTE Limited (“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 invested USD45m in Genser’s existing mezzanine loans and provided a further USD7.5m to build increased storage capacity at the proposed Takoradi NGL Terminal.
The senior loan facility was provided by a consortium of international banks and funds comprised of Standard Bank, ABSA Bank, Société Générale, Mauritius Commercial Bank, Ninety One, Barak Fund SPC Limited, the Development Bank of Southern Africa and Barak Fund SPC Limited.
The Mezzanine Loan Facility was provided by Trafigura Asia Trading Pte. Ltd, Barak Fund SPC Limited and 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. Barak Fund and TriLinc were advised by Hogan Lovells. Trafigura was advised by Latham & Watkins. The Senior Lenders were advised by Trinity LLP (Legal), Advisian – Worley Group (Technical) and Indecs Consulting Limited (Insurance).
Author: Bryan Groenendaal
