Africa records highest project finance deal value in 2020

In 2020, Africa recorded its highest level of project financing in a decade in terms of investment value with 28 deals, totalling $30.07bn, reaching financial close, according to Linklaters.

Despite there being a similar number of projects, 2020 saw double the value of deals in comparison to 2019, which recorded $12.65bn.

Andrew Jones, Head of Linklaters’ Africa group, said: “Like all countries, the major economies in Africa were impacted by the Covid-19 pandemic. Its therefore interesting that the continent recorded its highest level of project financing in a decade last year. This is indicative of the resilience and sound fundamentals of the continent and how the region continues to present exciting opportunities for long-term investors.”

Mozambique recorded the highest deal value in 2020 at $22.6bn, thanks to the Area 1 Mozambique LNG project, the country’s first onshore LNG development.

Morocco, Nigeria, Guinea, Uganda and Cote d’Ivoire were the only countries to record multiple project finance transactions this year at 6, 4, 2, 2 and 2, respectively.

Mozambique has recorded the highest deal value at $48.02bn in 12 projects in the past decade, with South Africa recording the highest level of activity, with 103 projects totalling $20.43bn.

According to Linklaters’s research, in the past decade, French sponsors have been the biggest investors in Africa, sponsoring 53 projects totalling $46.57bn followed by Japan (10, $31.6bn), the US (47, $26.95bn) and India (11, $25.85bn). 

In 2020, Renewables sector recorded the highest volume of deals, with 13 totalling $1.592bn, whereas Oil and Gas sector, although low by number of transactions, clocked the highest value of deals at $26.14bn.

Oil & Gas sector also witnessed the highest value of deals in the past 10 years at $85.73bn, while Renewables have witnessed the highest volume (177).

 “Economic expansion plans, favourable demographics and natural resources, and the need to generate large scale employment and infrastructure development will ensure continued growth for the sectors. This also means that strong growth will continue in energy, transportation and mining,” Jones said.

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