Can you tell us a little bit about the IFC’s history on the African Continent?
IFC has over six decades of history with Africa: IFC has invested more than $25 billion in African businesses and financial institutions, and our current portfolio there exceeds $5 billion. We are a leading provider of advice to promote a sustainable private sector and mobilize capital from other investors who invest alongside IFC in critical sectors for Africa’s future. IFC invests in a multitude of sectors, from banking to agriculture, with a clear focus on developmental impact. Some of our most significant investments in the oil & gas sector are the IFC financed the Chad-Cameroon pipeline, one of the first and few cross border infrastructure investments in Africa, whilst our World Bank colleagues financed the West Africa Gas pipeline. We also financed the Jubilee field, the first development to open up Ghana’s oil sector followed by the Sankofa field focused on the gas sector and the largest foreign direct investment ever in the country, providing the government with an estimated fiscal income of of $21bn over the life of the fields. creating over 166,500 full time direct and indirect jobs.
What do you see as the key challenges facing the industry in the region over the coming 5-10 years and how is the IFC positioned to overcome these challenges?
Energy investments in Africa are severely lagging other continents, due to factors such as regulatory environment, increasing political uncertainty, access to long term capital, and the size of individual gas markets where many countries have less than 1GW of installed capacity. The hydrocarbon reserves are there, but in a time where the E&P industry and its investors are still cautious with capital allocation, mitigating these “above ground” risks and making Africa attractive to investors is one of IFC’s biggest value proposition. On top of our AAA balance sheet which allows us to invest both debt and equity, as part of the World Bank Group we can help mobilize guarantee and insurance products, and provide project and sector specific advisory. We work with the World Bank to address gaps in the regulatory framework and capacity building with the aim to improve the bankability of the sectors we work in and attract investment capital.
Where do you see the opportunities for growth within the industry in the next 5 years and how is the IFC positioned to support these opportunities?
The Infrastructure needs in Africa continue to remain a multi-trillion dollar issue, with a direct impact on the Oil & Gas sector. Arguably financing offshore oil developments is now a relatively mature market where IFC has less of a role to play but upstream gas development in the poorest countries, financing critical pieces of infrastructure, creating an enabling environment for the supply and demand for gas to the nearly 600 million people with little to no access to clean, affordable and sustainable energy is a key are for IFC to focus on. Combining our Oil & Gas expertise, our understanding of complex infrastructure projects, our innovations in scaling renewable energy and our ability to be flexible in the type of capital we provide allows us to bundle the best of both traditional and new energy solutions for Africa.
What are some of the factors for potential investors to consider when looking at the African continent?
Oil & Gas is an intensely politicized sector, even more so in Africa where it can create unrealistic expectations both at the government and population level. Technical successes can quickly become commercial failures as things do take longer (by things I mean project delivery, authorisations, closing financings, or gas payments). Transparency, choice of partners, and attention given to environmental, social and community issues are key factors that give you the long-term license to operate and should be budgeted for from day one. As investors we are by nature optimistic, and sometimes we can be blinded by the numbers in Africa, from the reserves potential, the market potential driven by population growth expectation etc… the African potential is certainly there, and the most successful stories come from the most patient capital ready and prepared to ride the high waves created by the political and commodity cycles. In order to fully tap the African potential, moving from oil to gas, and further downstream will be key. This means not just finding a credit worth gas buyer, but also assessing and improving the resilience of the full energy chain, as we have done in other countries like Bangladesh and Pakistan where we sponsored the first Floating Storage Regasification Units to import LNG.
How important is the Africa Assembly as a meeting platform for the industry and what are you most looking forward to at the Assembly?
IFC has been one of the Oil & Gas (and Energy) council’s earliest partner. We have found that it is one of the best assembly in terms of meeting in one place project sponsors, investors, bankers, entrepreneurs, regulators… it gives us the ability to very quickly gauge the state of the market and where we can adapt our role to help unlock investments, make the markets more efficient and, in some cases, create the market.
About Olivier Mussat
Olivier Mussat is a Chief Investment Officer in the International Finance Corporation (IFC)’s global oil and gas division. IFC, a member of the World Bank Group, is the largest development finance institution focused on the private sector. IFC’s $2 billion oil & gas portfolio spans over 30 developing countries. Olivier’s work in oil and gas financing includes equity, mezzanine and senior debt as well as advisory services for exploration & production companies, pipelines and LNG investments, and oilfield services.
Before joining IFC, he worked on a number of award winning and transformational financings such as the Jubilee Field in Ghana, oil fields in Africa, or Gas projects in the Middle East and North Africa for Standard Chartered Bank. His experience in the energy sector spans finance and the industry, covering strategic planning, business development, economics, and engineering, working with both the private sector and national oil companies.
Olivier started his career as a field engineer for Ecolochem, a General Electric company, and later joined Schlumberger, the world’s largest oilfield services company, covering projects in Europe, the Middle East and Africa. He holds a BA from Virginia Wesleyan, a MS from Ecole Centrale Paris, and he is a member of the Society of Petroleum Engineers.