Banks keen on Africa oil and gas
• Partnership spots investment opportunities worth $9.8bn in oil and gas, power, infrastructure and mining
Standard Bank and the Industrial and Commercial Bank of China, the world’s biggest bank by assets, have identified $9.8bn worth of investment opportunities in Africa in oil and gas, power and infrastructure, and mining and metals. /
Standard Bank and the Industrial and Commercial Bank of China (ICBC), the world’s biggest bank by assets, have identified $9.8bn worth of investment opportunities in Africa in oil and gas, power and infrastructure, and mining and metals.
Speaking on the sidelines of a briefing on Monday about future relations between the two banking groups, Kenny Fihla, the CE of Standard Bank’s corporate and investment bank, was tightlipped about which projects had been identified, saying funding had not yet been committed.
The $9.8bn was in addition to an $8bn commitment by Standard Bank and ICBC to Mozambique’s liquefied natural gas development, Fihla said. The IMF estimates that Mozambique could become the third-largest liquefied natural gas exporter in the world.
The African Development Bank estimates that Africa’s infrastructure needs amount to between $130bn and $170bn a year, with a financing gap of between $68bn and $108bn.
Over the past decade, Standard Bank and ICBC have provided $8.5bn in financing support for 35 projects in Africa involving Chinese companies.
ICBC, which boasts $4.5-trillion in assets and operations in 45 countries, bought a 20% stake in Standard Bank for $5.5bn in 2008. The deal remains the single largest investment in Africa by a Chinese enterprise.
Standard Bank CEO Sim Tshabalala and ICBC chairman Yi Huiman reaffirmed their commitment to the partnership at a media briefing on Monday ahead of the Brics summit — a meeting between Brazil, Russia, India, China and SA, a grouping of countries seen to represent the interests of non-western, emerging economies.
The summit begins in Johannesburg on Wednesday and seeks to strengthen economic and political co-operation between the countries.
Chinese President Xi Jinping, Indian Prime Minister Narendra Modi, Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan are to attend.
For Standard Bank, Africa’s largest bank by assets, the partnership with ICBC would “continue to deepen and accelerate Africa-China trade, investment and growth”, Tshabalala said.
“Not many companies in the world can service African corporations on the ground and have access to an important centre of capital, trade and investment, being China.”
A joint Africa-China banking centre in Johannesburg featured Mandarin-speaking consultants to assist Chinese businesses in Africa, as well as African entrepreneurs, he said.
The Brics summit provided companies with opportunities to have “important conversations” with Chinese counterparts about improving SA’s manufacturing capacity, Tshabalala said.
As China modernised manufacturing processes, opportunities arose for countries with high unemployment, said Fihla. SA needed to position itself to attract manufacturing skills.
Africa’s fastest-growing countries, such as Kenya, Tanzania and Ethiopia, were those that had improved the ease of doing business, Tshabalala said.