African Infrastructure Investment Managers (AIIM) has marked its expansion into the Nigerian gas market with the acquisition of stakes in assets owned by Savannah Petroleum.
AIIM said it has bought a 20% stake in Seven Uquo Gas, a company that holds a 40% participating interest and a 100% gas economic interest in the Uquo gas field.
AIIM has also bought a 20% stake in Accugas, the integrated processing and distribution infrastructure for Uquo gas.
Financial details were undisclosed.
The acquisitions were done through AIIM’s African Infrastructure Investment Fund 3.
AIIM’s West African director Olusola Lawson, said: “This deal firmly supports AIIF3’s investment strategy, which targets significant influence investments across the power, transport and midstream energy sectors - three focus verticals across sub-Saharan Africa where AIIM sees the greatest disconnect between the demand for critical infrastructure and available capital for these projects.”
In Nigeria, estimated peak energy demand is estimated to be over 20,000MW, but this is only met with less than 5000MW of peak supply, Lawson said.
“This highlights the power demand gap on the national grid, which is partially due to the unavailability of gas to some of the existing generation plants.
“AIIM’s investments will help to bridge this gap, creating positive impact outcomes for businesses, communities and individuals on the ground.”
Andrew Knott, CEO of Savannah Petroleum, said: “The gas to power sector in West Africa is primed for considerable growth over the coming years, so we believe that both Accugas and Uquo offer investors exposure to a fast-growing economy in need of additional power supplies.
“Both AIIM and Savannah are fully aligned and remain focused on delivering sizeable growth and cash flows at these high margin assets.”
Savannah Petroleum owns the remaining 80% of each company.