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Nigeria, Morocco Sign $1.4b Pact to Establish Fertiliser Plant in Akwa Ibom

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By Tony Obiechina, Abuja

The Nigeria Sovereign Investment Authority (NSIA)
NSIA, under its Gas Industrialization Strategy, has signed five agreements with OCP of Morocco, and key other operators in the oil and gas value chain for the  development of US$1.4 billion plant to produce Ammonia and Di-ammonium Phosphate in Nigeria.

Other parties to the agreements which were signed in Benguerir, Morocco on Tuesday, according to a statement released by NSIA in Abuja on Wednesday, included the Nigerian National Petroleum Corporation (NNPC), Nigerian Content Development & Monitoring Board (NCDMB), GACN (Gas Aggregation Company Nigeria Limited), Akwa Ibom State Government, the Fertilizer Producers & Suppliers Association of Nigeria (FEPSAN) and Mobil Producing Nigeria (MPN).

The statement explained that the agreements would further cement the joint resolve of President Muhammadu Buhari, and his Moroccan counterpart, King Mohamed VI, to develop a Multipurpose Industrial Platform project in Nigeria, in the quest for industrialization, food security and continental cooperation.

It said “the Multipurpose Industrial Platform Project “is a backward integration initiative, which builds on the successes of the Presidential Fertilizer Initiative (PFI) and other sovereign bilateral initiatives between Nigeria and Morocco. The project is structured to commercialize Nigeria’s vast natural gas resources and satisfy Morocco’s demand for cost-competitive Ammonia”.

The statement listed the agreements to include, *Memorandum of Understanding (MOU) between Nigeria Sovereign Investment Authority (NSIA), OCP Africa and the Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN) to commit to the second phase of the Nigerian Presidential Fertilizer Initiative (PFI II).

*A Shareholders Agreement (SHA) between the NSIA and OCP Africa for the creation of the Joint Venture Company (JVC) which will oversee the development of an industrial platform that will produce ammonia and fertilizers in Nigeria. 

*A MOU between NSIA, OCP Africa and the Akwa Ibom State in Nigeria on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

*A MOU between NSIA, OCP Africa, and the Nigerian National Petroleum Corporation (NNPC), to evaluate the opportunity of an equity investment by the NNPC in the JVC and for its support on gas.

*A Framework Agreement between NSIA, OCP Africa, Mobil Producing Nigeria (MPN), the NNPC and the Gas Aggregation Company Nigeria (GACN) on gas supply for the MPI.

The statement explained that the two agreements relate to the second phase of the Presidential Fertiliser Initiative (PFI II) while the last three contracts underpin the creation of a Multipurpose Industrial Platform (MPI) to be sited in Akwa Ibom State. 

The agreements on the second phase of the PFI give effect to the presidential directive which has restructured the PFI programme. Under the revised structure, NSIA’s role moves upstream thereby limiting its involvement to bulk importation of raw materials on behalf of the fertilizer blenders, with bank guarantees provided by the blenders. This approach will make the programme more sustainable, strengthen the productive capacity of the blending plants and eliminate financial risk to the NSIA.

On the MPI project, three agreement were signed. The first is for land acquisition, the second for equity investment in the joint venture company to operate the MPI and the last for gas supply to the project. 

The first phase of the MPI Project will produce 1.5 million tonnes per annum of Ammonia in two phases. Up to 70% of the Ammonia produced will be allocated for export to Morocco and the balance will be routed to the production of 1 million tonnes per annum of Di-ammonium Phosphate (DAP) and NPK fertilizers to feed domestic demand. It is expected that project construction will commence no later than Q3, 2021. In the first phase of the project, US$1.4billion will be invested in building out the plant and its supporting infrastructure with a target operations-commencement date of 2025.

The project will be sited in Akwa Ibom State in a gas-rich location. Factors such as land availability and accessibility; gas adequacy; sufficiency of marine draft; and other environmental and social considerations informed the decision to site the plant in Akwa Ibom. 

At completion, the integrated Ammonia and fertilizer plant will house – within its battery limits – the process plants for Ammonia and fertilizer production, administrative buildings, fertilizer bagging units, water purification units, storage for raw materials and finished goods, onsite power plant and other ancillary facilities. The plant will have a dedicated jetty to facilitate seamless importation of raw materials from Morocco and other suppliers and export of excess Ammonia and fertilizer to Morocco and potentially other regional markets.

Speaking on the development, Chief Timipre Sylva, Minister of State for Petroleum and head of the Nigerian delegation said “I assure you that President Muhammadu Buhari is very committed to actualisation of this project. He has mandated the Ministry of Petroleum Resources and all its agencies, notably the NNPC, DPR, NCDMB and all other government agencies to give maximum support for this project.”

Welcoming the Nigerian contingent, the Chairman and CEO of OCP, Dr. Terrab said “Ultimately, these agreements will strengthen the partnership between the NSIA and OCP Group and the different institutions in the gas industry in Nigeria. The outcome of today’s agreements will translate to knowledge transfer and broader economic opportunities as we build out the industrial platform. The platform will leverage the best of Nigerian and Moroccan natural resources, namely the Nigerian gas and the Moroccan phosphate and create a new basis for stronger ties”.

In his comment, Mr. Uche Orji, MD & CEO of NSIA said “this project forms a key part of NSIA’s gas industrialisation strategy and will deep intra-continental trade which is essential to Africa’s development and economic renaissance. This landmark project, the MIP, will explore increased levels of synergy between NSIA and OCP and the partners to the transactions and ultimately ensure that Nigeria builds an industrial base that is sustainable and complimentary to mutual objectives of developing the agriculture sector in Nigeria”.  The changes to the PFI significantly reduces NSIA involvement and transfers the responsibilities to the blenders .

Speaking on the project, Mal. Mele Kyari, GMD NNPC remarked that the “NNPC and all its subsidiaries are committed to the project”. He further added that “NNPC is committed to taking equity stakes in the joint venture company and will ensure sufficient gas is available for the project to succeed”. 

In his remarks, Akwa IbomState Governor, Udom Emmanuel assured the parties that “Akwa – Ibom is committed to ensuring the PMI project is a resounding success. Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality. With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”.

Engr. Wabote, Executive Secretary, the Nigerian Content Development and Monitoring Board (NCDMB), said, “We are committed to ensure that clear operational guidelines and constructive oversight is provided to support the project. The investment is a welcome development, and we look forward to the commencement of the project”.

Also speaking, Mr. Ogunleye, Managing Director and Chief Executive Officer, Gas Aggregation Company Nigeria (GACN) remarked “We are looking forward project. All the support required for its success within our remit will be provided. We expect that this will encourage more investment of this nature in Nigeria”.

Making his comments, Mr. Thomas Etuh, Chairman FEPSAN, said “Nigeria possesses an enviable reserve of natural gas while Morocco is a leader in Fertiliser production. These comparative advantages make for a partnership between our two countries that is mutually beneficial and scalable. FEPSAN was a party to the first structure of the Presidential Fertiliser Initiative (PFI). We are working now to ensure that the results of the first phase are improved upon and broadened in the new structure”.

The Nigeria Sovereign Investment Authority (“NSIA” or “the Authority”), an investment institution established by the Nigeria Sovereign Investment Authority (Establishment, etc.) Act 2011. It was set up to manage funds in excess of budgeted hydrocarbon revenues on behalf of all tiers of government in preparation for the eventual depletion of the resource. The Authority’s mission remains to play a leading role in driving sustainable economic development for the benefit of all Nigerians. 

Based on its mandate, the NSIA operates three ringfenced funds namely: the Stabilisation Fund, the Future Generations Fund, and the Nigeria Infrastructure Fund. 

Within the remit of its mandate, NSIA invests in a diversified portfolio of medium and long-term assets, serves as a catalyst to attract co-investments, and manages third party funds on behalf of other government institutions against target returns. 

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Afreximbank Closes $282 million India-focused Club Deal

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By Tony Obiechina, Abuja 

The African Export-Import Bank (Afreximbank) has announced the successful completion of a first-of-its-kind India-focussed club deal for US$282.00 million.

Initiated for the exclusive participation of Indian lenders, and arranged by Bank of Africa UK PLC, the primary syndicated club deal saw participation from Indian lenders through their overseas branches and subsidiaries in the Dubai International Financial Centre in the United Arab Emirates, Singapore and Mauritius.

The facility, which was backed by six participating banks and financial institutions, including five that joined as first-time lenders to Afreximbank, helping the Bank achieve its objective of diversifying its funding sources, carries a three-year tenor.

At a commemorative event held in Dubai, U.A.E., to mark the conclusion of the deal, Haytham ElMaayergi, Executive Vice President at Afreximbank, said that the conclusion of the initiative represented a major milestone for the Bank as it sought to fulfil the key objectives of its funding programme.

Highlighting the importance of investing in, and for, Africa, Mr. ElMaayergi said: “this facility will help Afreximbank to continue to play a major role in the development of intra-African trade and trade between Africa and the rest of the world, particularly with India. 

It is a testament to the rapid growth in Africa’s economic relationship with India and is evidence of Afreximbank’s growing ability to harness resources into Africa and to fund trade finance related investments that would have a positive impact on trade between Africa and India.”

Chandi Mwenebungu, Director and Group Treasurer of Afreximbank, reviewing the Bank’s vision for Africa, said that its funding objectives included achieving the diversification of its liability book by geography, investor type and tenor.

Also addressing guests at the event were Said Adren, CEO of Bank of Africa UK PLC, who thanked the lenders for their participation, and Zineb Tamtaoui, General Manager of Bank of Africa, Dubai Branch, who expressed appreciation for the opportunity to put together “a landmark deal that would be a stepping stone to many India-focused club deals going forward.”

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Geregu Power Earns N50.4bn From Electricity Sales, Capacity Charges 

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By Tony Obiechina, Abuja 

Geregu Power Plc has generated N50.4bn on electricity sales and capacity charges to Nigerians in the first quarter of 2024.

The power company which is the first listed power company of the Nigerian Exchange Ltd disclosed the performance in its Q1, 2024 financial statement.

The company grew its Q1 revenue by 225 per cent from N14.

2bn in 2023 to N50.
4bn in 2023.

A breakdown reveals that Geregu Power sold energy worth N31bn and received N19bn as revenue from capacity charge.

Recall that the power company posted an annual revenue of N82.9bn in the full year of 2023 but it has covered half of the amount in Q1.

The revenue was above the company’s forecast for Q1 2024 when it projected its revenue to rise to N31.24bn.

Geregu Power recorded a profit before tax of N21.9bn up from the N5.3bn recorded in Q1 of last year, reflecting 307.8 per cent growth.

During the period underreview, the company saw its profit after tax rose by 307.3 per cent to N14.46bn from N3.54bn recorded in Q1 of last year. In the full year 2023, the company made N16.1bn net profit.

The net profit was above the company projection of N5.5bn. 

Geregu Power took an income tax charge of N7.43bn, up from the N1.8bn in Q1 2023. The tax charges were higher than the N2.7bn projected for Q1 2024.

The company also spent N21.5bn on the cost of sales involving gas supply and transportation, up from the N6.6bn spent on gas supply and transportation in Q1 2023.

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CBN Shakes Up Banking Sector: A Paradigm Shift Unveiled

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By Ademola Oyetunji 

In a surprising turn of events on Wednesday, the Central Bank of Nigeria (CBN) dissolved the boards of three prominent commercial banks – Keystone, Polaris, and Union Bank. This move, although unanticipated, transpired despite the Central Bank’s recent endorsement of these banks’ financial soundness.

Governor Olayemi Cardoso, at his inaugural address during the Chartered Institute of Bankers of Nigeria (CIBN) annual dinner last year, had lauded Nigeria’s financial sector’s resilience in 2023.

Stress tests conducted on the banking industry indicated its strength under various economic scenarios. However, Cardoso highlighted the need for banks to reassess their responsible banking framework, a sentiment echoed by President Tinubu.

President Tinubu’s evident discontent with the Godwin Emefiele-led CBN triggered a comprehensive review of the financial system. A special investigator, Jim Obazee, was appointed to conduct a forensic investigation into Emefiele’s tenure, with damning revelations emerging. Recent developments suggest the initiation of a full-blown financial system reform.

The CBN’s dissolution announcement and the subsequent appointment of new executives for the affected banks, including Yetunde Oni, Mannir U. Ringim, Hassan Imam, Chioma A. Mang, Lawal M. Omokayode, and Chris Onyeka Ofikulu, might mark the beginning of implementing the investigation’s recommendations – a significant cleanup of the financial sector.

Allegations surfaced during the investigation, suggesting non-cooperation from some bank executives and Emefiele’s questionable acquisitions through proxies and cronies. Cardoso may have secured presidential approval for the CBN’s decisive action.

The CBN cited various infractions by the banks, including regulatory non-compliance, corporate governance failures, and activities threatening financial stability. Despite the challenges, the CBN assured the public of depositors’ fund safety and its commitment to upholding a safe, sound, and robust financial system.

The Special Investigator’s report revealed documents pointing to Emefiele’s involvement in Titan Trust Bank and Union Banks’ acquisitions with ill-gotten wealth. The CBN’s swift replacement of the ousted chief executives received widespread commendation, especially from high-net-worth stakeholders aiming to avert a crisis of confidence within the affected banks.

Adewale Aderounmu, an industrialist, applauded the CBN for implementing effective policies under Olayemi Cardoso’s leadership, despite detractors’ actions against the Naira. Ayomide Deepak, an Abuja-based stockbroker, welcomed the action but emphasized the need for caution in handling revelations from the investigation to prevent further economic challenges.

As the CBN wields its regulatory hammer on these banks, the hope is that other bank executives and investors will learn valuable lessons for the sake of the economy. The CBN’s action is perceived as a strategic move aimed at revitalizing the economy and financial system, not a mere vendetta.

*Ademola Oyetunji writes from Ibadan.

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