Investors update: June 28 2023 - South Africa inks partnerships on $1bn green hydrogen fund

South Africa inks partnerships on $1bn green hydrogen fund

Highlights

• South Africa, Denmark, and the Netherlands have teamed up to launch SA-H2, a $1 billion fund with a mandate to bolster green hydrogen projects in South Africa. 
• The fund will be backed by numerous financiers, including the Dutch investment entity, Invest International, which contributed $50 million. 
• The rest of the fund is set to be raised over the next two years, with contributions from various financiers, including the Development Bank of Southern Africa, Industrial Development Corporation, and insurance firm Sanlam, with management set to be handled by the Dutch Climate Fund Managers.

Source: Zawya

Our Takeaway

As Eskom’s struggles continue, South Africa seems to be seeking alternative energy sources to support the crumbling national grid. In April, the city of Cape Town also announced a $65 million solar PV and solar battery project to tackle load-shedding. News of the fund comes barely a week after the launch of the $1.1 billion SDG Namibia One, which seeks to raise capital from local and international investors to also finance green hydrogen projects in the neighboring South African country. Home to some of the world’s sunniest countries, Africa has the potential to become the global renewable energy hub.

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NGX benchmark equity index soars to its highest level since 2008 

Highlights

• The Nigerian stock market closed in the green on Tuesday, with the All-Share Index (ASI) rising by 1.3% to cross 60,000 index points, for the first time since 2008.
• Nigeria’s equity market has maintained a positive performance since the swearing-in of its new president, which was swiftly followed by the suspension and arrest of the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, and changes to Nigeria’s foreign exchange operational framework. 
• Market operators are now expecting that the reforms in the monetary and forex policy will lead to an inflow of foreign portfolio investment in the market. 

Source: Nairametrics

Our Takeaway

Ahead of the two-day Eid-el-Kabir break, the Nigerian Exchange (NGX) closed positive with the benchmark index trading 1.30% higher to close at 60,108.86 index points as against 59,338.76 index points recorded in the previous day’s trading session. The market capitalization of equities saw a gain of N422 billion to close at N32.730 trillion (equivalent to around $43 billion), 1.31% higher than the N32.308 trillion recorded in the previous trading session. The World Bank predicts Nigeria could save up to $5.10 billion this year alone after reforms to its foreign exchange market and the removal of a petrol subsidy.

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Nigeria is getting $750m to provide electricity to rural communities

Highlights

• The World Bank plans to commit $750 million through the Nigeria Electrification Project (NEP) to enhance rural electrification and improve access to electricity for Nigerians.
• Elizabeth Huybens, the World Bank’s Director of Strategy and Operations for the Western Central African Region, announced the plan during her visit to inspect the 60 KiloWatts Mini-Grid Project in Abuja.
• Implemented by the Rural Electrification Agency (REA), the NEP project aims to provide electricity to remote areas, supporting productive activities and benefiting rural Nigerians.

Source: Nairametrics

Our Takeaway

Today, the world’s largest unelectrified population lives in Nigeria. Of the country’s 200+ million people, more than 90 million still lack any access to electricity. Low per capita electricity consumption (13% of the modern energy minimum threshold), dependence on mostly subsistence agriculture (70% of the population), high unemployment (35%), and underemployment (22%), all combine to create substantial development challenges. Expanding access to clean and reliable energy is among the most powerful available levers to quickly change the economic prospects of all Nigerians and efforts like the $750m world bank commitment are crucial to achieving this.