A view of the newly-commissioned Dangote Petroleum refinery is pictured in Ibeju-Lekki, Lagos, Nigeria May 22, 2023. REUTERS/Temilade Adelaja/File Photo Purchase Licensing Rights
LONDON/BRUSSELS, Feb 14 (Reuters) – Nigeria’s Dangote oil refinery has issued tenders to sell two fuel cargoes for export, the first from the newly commissioned refinery, trading sources with knowledge of the matter told Reuters.
The refinery, Africa’s largest with a nameplate capacity of 650,000 barrels per day, was built on a peninsula on the outskirts of the commercial capital Lagos by the continent’s richest man Aliko Dangote.
Nigeria has for years relied on expensive imports for nearly all the fuel it consumes but the $20 billion refinery is set to turn it into a net exporter of fuel to other West African countries, in a huge potential shift of power and profit dynamics in the industry.
Sources told Reuters last week that the refinery was preparing to deliver its first fuel cargoes to the domestic market within weeks.
The two fuels on offer are typical products of running light sweet crude through a crude distillation unit (CDU) in a refinery without further upgrading capacity. It is expected to take months for upgrading units to be brought online, experts have said.
The refiner began buying crude in December last year and Nigeria’s state-owned oil firm NNPC Ltd has been the main supplier. Dangote has also purchased some U.S. oil and is expected to receive 2 million barrels of U.S. WTI Midland in early March, according to LSEG and Kpler ship tracking.
Reporting by Ahmad Ghaddar and Robert Harvey in London, Julia Payne in Brussels. Additional reporting by MacDonald Dzirutwe in Lagos and Arathy Somasekhar Editing by Mark Potter, Kirsten Donovan
Mali’s exit from the bloc comes as citizens complain about fallout of regions sanctions imposed following the two coups
By Hannane Ferdjani
Published On 8 Feb 2024
Bamako, Mali – It’s been a week since Mali’s military government announced its decision to withdraw from the Economic Community of West African States (ECOWAS) but Bamako, the country’s capital, is still buzzing with energy.
In the early hours of the morning, the roads are bustling with city buses pushing through traffic jams, while market vendors walk hastily to their stalls to get the day started. But beneath that layer of normality are mounting concerns about leaving the 15-member regional bloc which Mali joined in 1975.
“It has become harder to get by and provide for my family,” Djadjie Camara, a shopkeeper in the city told Al Jazeera. “ECOWAS is the organisation who started all of this and made our lives harder. Life is hard for us, but I trust that leaving ECOWAS will benefit us in the end.”
After back-to-back coups in Mali within a year led to Colonel Assimi Goita becoming head of state in May 2021, the bloc slapped economic sanctions on the landlocked nation to push the transitional government to hold elections within a reasonable timeframe.
But that hit an economy grappling with blows from the COVID-19 pandemic and shocks from Russia’s war in Ukraine, hard. Inflation rose, with the cost of basic items like oil and sugar more than doubling. Since then, many Malians, including Camara, have embraced the government’s gradual distancing from the regional entity.
This was the main argument presented by the newly formed Alliance of Sahel States (l’Alliance des Etats du Sahel or AES), including Mali, Niger, and Burkina Faso, in a January 28th joint statement announcing their withdrawal from the bloc, which they said had imposed “illegal, illegitimate, inhumane, and irresponsible sanctions”.
The second point of contention is ECOWAS’s perceived failure to aid their “essential battle against terrorism and insecurity”.
Diverging visions of pan-Africanism
When ECOWAS was established by the Treaty of Lagos on May 28, 1975, its primary focus was economics, aiming to create a West African market encompassing several neighbours.
A few years in, African leaders concluded that without political stability, they could not achieve their ultimate goal: a free market operating under a single currency. Hence, the birth of the Economic Community of West African States Cease-fire Monitoring Group (ECOMOG) in 1990. To foster regional integration, ECOWAS intermittently uses its authority to enforce trade sanctions and intervene militarily under specific conditions.
In their joint statement in January, AES also said ECOWAS had strayed from those original pan-African principles and was now under the influence of external forces.
Former colonial masters France, the European Union, the United Kingdom and the United States have sided with ECOWAS’s anti-coup stance, cutting off military aid and other forms of funding to the trio. Consequently, many now see the bloc as a puppet of the West with new ideas about regional identity.
“Pan Africanism today is about realising the United States of Africa,” former Malian Prime Minister Moussa Mara told Al Jazeera. “Strategically, this move is a mistake. It would translate into departing further away from the African integration goal whereby regional economic communities are integral.”
“Let us push back against that from within but leaving is not the solution,” he added. “The entire African continent accounts for 3 percent of the global GDP. West Africa represents less than 1 percent of that. We should consolidate these shares rather than disintegrating them.”
Together, the three exiting Sahel states in the AES represent just 8 percent of ECOWAS’s gross domestic product (GDP), which amounts to $761bn.
A withdrawal from the bloc could affect economic operators in AES who have benefitted from a regional free market where goods are exempt from tariffs and people travel as they please without visas.
Already, transport carriers are aware of what may change if the government sticks with the move.
“Things have changed in the last three years,” Tijani Mahamoudou, a truck driver from Niger, told Al Jazeera at a truck and trans-border bus station in Bamako. “We used to drive up and down to Senegal or Ivory Coast. Some of us carry merchandise. Others carry passengers. But since the coup, the border police going into these countries have become tougher. They check people’s IDs and our cargo. They make us waste time and money on these roads.”
“Even the way they talk to us and perceive us has changed. I know that if the AES leaves ECOWAS, things will only get worse for us who are always on the road,” he added.
‘We don’t know what to believe any more’
On Thursday, several hundred people demonstrated in Bamako in support of the government’s decision to withdraw from ECOWAS. Other rallies were held in towns, such as Kayes and Sikasso in the west and south of the country respectively.
The gatherings were in response to the transitional government’s call for people to take to the streets as they have routinely done so in the past three years. However, observers have argued that support for the state is on a decline unlike at the beginning of the transition.
“They had told school directors to let kids leave early to partake in the march, but even that didn’t happen,” a politician’s attaché who chose to remain anonymous told Al Jazeera about the last rally. “People have bigger problems … a regular Malian man wants to be able to provide for his family but with the electricity crisis that we’ve had, it’s become nearly impossible.”
From Bamako to Gao, power outages have become a persistent issue plaguing the entire country. Frustration has been mounting not only towards the national electricity provider, Energie du Mali (EDM) but also towards the transitional government.
And Malians have said the lack of proper governance is taking a toll on their source of livelihoods.
“We marched to chase IBK [former President Ibrahim Boubacar Keita] away [in 2020]. We marched to support the military, who helped us finish the job. They’ve been saying that our lives would get better, but we still haven’t seen it. I have a shop where I can’t sell cold drinks any more … We don’t know what to believe any more,” another shopkeeper told Al Jazeera anonymously.
Coup plotters cited deteriorating security as one of the reasons for taking over. Authorities have since signed off on the end of a UN peacekeeping mission and seen off French troops. The state has also instituted an arrangement with Russian military instructors believed to be mercenaries within the ranks of Moscow-linked private military contractor, Wagner.
But violence by armed groups is still on the rise. Data from the Armed Conflict Location & Event Data Project (ACLED) shows that there was a 38 percent increase in attacks in 2023 alone.
The renewed antirebellion effort has come with allegations of serial human rights violations.
“We’ve been sinking deeper and deeper and continue to do so,” Moussa Kondo, executive director at the Bamako-based think tank, Sahel Institute, told Al Jazeera.
Kondo, a former journalist, was appointed a presidential adviser on governance, democracy, and rule of law in October 2021. He resigned from his post a year later citing personal reasons and resumed his work in civil society.
“We’ve rejected everything that we consider to be aligned with Western interests. But that doesn’t mean we should put all our eggs in one basket with Russia. It’s not about saying no to one foreign power only to say yes to everything another foreign power proposes … Our leaders have to remain transparent and keep away from manipulating the people with rhetoric,” Kondo said.
Under Article 91 of the ECOWAS Treaty, a state can only withdraw membership after giving a written one-year notice and abiding by its provisions during that period. If after a year, the AES states do not withdraw their notification, they will effectively no longer be part of the bloc.
Some believe reunification in the region is still possible before then.
“I think there’s still time to backpedal … we can sit at a table and negotiate,” Mara told Al Jazeera. “That is what I wish for and appeal to our authorities to do, especially as ECOWAS have said they are willing to find a negotiated path forward and the AU has pledged to mediate those talks. I’m still optimistic.”
February 1st, 2024 By Ben Payton Image : rufous / Adobe Stock
The private sector is playing an ever increasing role, but grid capacity constraints and macroeconomic headwinds pose key challenges
February 1st, 2024
At the beginning of 2024 Africa has come to a key juncture in its renewable energy rollout.
The potential of technologies such as wind and solar energy to help close the continent’s energy access gap is now beyond doubt. Across Africa, however, there are multiple challenges in accelerating the speed and scale of the drive for renewables.
Roughly half of Africa’s population, around 600m people, lacks access to electricity; millions more endure an unreliable or intermittent supply.
Solar, in particular, has a key role in bringing more reliable access. Most of Africa enjoys excellent conditions for solar generation; and solar is well-suited for both utility-scale projects and smaller schemes designed to serve homes and businesses in remote areas.
Last year’s COP28 climate conference, along with the Africa Climate Summit held in Nairobi last September, reaffirmed the importance of renewables on the continent.
But whether 2024 will see donors and development finance institutions (DFIs) turn commitments into action remains to be seen. The International Energy Agency (IEA) estimates that $28bn in concessional capital is needed each year up to 2030 to mobilise $90bn in private sector investment – a more than tenfold increase from the present level.
Technologies mature
Hydropower, which has played a key role in the power sectors of many African countries for decades, remains the leading source of renewable energy on the continent. However, it is solar that is increasingly emerging as the main source of new capacity.
According to the African Solar Industry Association (AFSIA), the continent installed a record 3.7 GW in 2023, representing year-on-year growth of 19%. AFSIA notes that utility-scale solar projects are less common in Africa than in the United States, Europe or China. By contrast, it says 65% of the capacity added last year came from commercial and industrial projects – a large share of which are in South Africa.
“In [the] absence of reliable utility companies and grids supplying the required electricity, African companies and businesses finally have found an alternative with solar and storage thanks to plummeting prices of both key components,” AFSIA said in a report.
Meanwhile, cash-strapped utilities are increasingly looking to the private sector to supply electricity from large-scale wind and solar projects to the grid. In South Africa, a bidding round for independent power producer (IPP) projects, which will conclude in April, will be crucial for efforts to end the country’s disastrous power shortages.
Zambia is another country where the government is turning to the private sector, as it looks to extend electricity access to 60% of its population by 2030. Reforms introduced by President Hakainde Hichilema have facilitated private investment in the power market, with a focus on streamlining regulator approvals.
“Most renewable energy projects will continue to be financed at an increasing rate by the private sector in Zambia,” says Kusobile Kamwambi, head of the country’s Presidential Delivery Unit.
But one challenge, likely to become ever more evident in 2024, is that electricity grids in many African countries are struggling to absorb the power supplied by renewables. In Zambia, for example, ZESCO has set a cap of 50 MW on IPP projects – a limit that makes investment less attractive for some players in the sector.
Grids and batteries
The electricity shortages in countries such as South Africa highlight the importance of upgrading grid infrastructure at both the national and regional levels. Holger Rothenbusch, managing director and head of infrastructure and climate at British International Investment, the UK’s DFI, says that investment in cross-border transmission infrastructure will increase. He notes that there are “many exciting prospects” in decentralised renewable energy systems, which enable renewable generation in areas where grid access remains difficult.
“We are starting to see the potential of mini-grids to bring power to countries such as DRC and Burundi with historically low rates of access,” he says.
“Projects are being delivered with attractive financing models such as grants and private capital to mitigate offtake risk.”
A police officer patrols substation of Kenya Electricity Transmission Company Limited in Suswa on August 4, 2017. PHOTO | AYUB MUIYURO | NMG
The African Development Bank (AfDB) wants Kenya and Tanzania to speed up the signing of three key agreements to pave the way for the exchange of excess electricity between the two countries via a Ksh43 billion ($309.26 million) line.
The three are a wheeling agreement between Tanzania Electric Supply Company (Tanesco) and Kenya Electricity Transmission Company Limited, a power exchange deal between Kenya Power and Tanesco and a tripartite deal for the maintenance of the interconnected grid.
The two neighbours were last month expected to complete the 507.5-kilometre line that runs from the Isinya substation to Arusha through Namanga. The line will have an intended transfer capacity of 2,000 megawatts.
AfDB— a major financier of the project— in its latest review said that the three deals are key to rolling out the regional power trade meant to boost electricity supply and cut reliance on the dirty and costly thermal power in the two countries.
“It is of significant importance that the afore-mentioned agreements are concluded as soon as possible to coincide with the completion and commissioning of the cross-border electricity infrastructure to pave the way for regional power trade,” AfDB says in the review.
Wheeling is the transfer of electricity from an electrical grid to an electrical load outside the grid boundaries through the use of existing distribution or transmission networks.
Completion of the 400 kilovolts line had been plunged into uncertainty as Ketraco delayed completing its share of the line due to hitches in compensating and resettling families along the project area.
The line whose construction started in 2015 will allow cross-border exchanges of cheap and cleaner surplus power from neighbouring countries in the Eastern Africa Power Pool countries.
Nations in the Eastern Africa Power Pool are Kenya, Tanzania, Uganda, the Republic of Sudan, South Sudan, Burundi, the Democratic Republic of Congo, Djibouti, Ethiopia, Egypt, Somalia, Rwanda and Libya.
Kenya currently imports cheap hydroelectricity from Ethiopia and Uganda and the supplies have been critical in helping avoid power rationing especially last year when hydro-generation hit record lows on prolonged drought.
Tanzania has recently been forced to ration power in some parts due to low hydro generation, highlighting the critical role of the line to the neighbouring country. The line will also allow Tanzania to tap cheap hydroelectricity from Ethiopia.
Ketraco had delayed the completion of the line on the Kenyan side which spans about 93 kilometres between Isinya substation and the border town of Namanga.
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