LAGOS, Sept 18 – TotalEnergies has agreed a $1.8 billion capital contribution from Global Infrastructure Partners (GIP), the infrastructure investment platform owned by BlackRock, for a portfolio of assets associated with the French energy major’s oil and gas developments in Africa.
Under the agreement, GIP will provide the upfront capital in exchange for tariff payments linked to the volume of infrastructure throughput over a period of up to 15 years. TotalEnergies did not disclose the specific assets covered by the transaction.
The arrangement provides TotalEnergies with capital against infrastructure assets while allowing GIP to generate long-term returns from their use.
“We are pleased to strengthen our relationship with GIP through this infrastructure agreement which crystallizes the value of some of our midstream infrastructure assets in Africa,” said Jean-Pierre Sbraire, Chief Financial Officer of TotalEnergies.
The transaction comes as TotalEnergies continues to maintain a significant investment footprint across Africa, particularly in oil and gas production and associated transportation infrastructure.
One of its major ongoing projects is the development of oil fields in landlocked Uganda and the construction of infrastructure to transport crude to Tanzania’s coast for export. The project, known as the East Africa Crude Oil Pipeline (EACOP), forms part of a wider development estimated at $5.6 billion.
EACOP has faced opposition from environmental groups, which have campaigned against financial institutions providing funding for the project. Despite the controversy surrounding the pipeline, a number of financial institutions have committed to financing.
The African Export-Import Bank, Standard Bank of South Africa, Stanbic Bank Uganda, KCB Bank Uganda and the Islamic Corporation for the Development of the Private Sector agreed to provide funding for an initial tranche of the pipeline last year.
Standard Chartered, one of the major banks involved in African infrastructure financing, decided not to finance EACOP.
The new agreement with GIP illustrates a broader financing approach in which infrastructure investors provide capital against long-term cash flows generated by energy assets. For TotalEnergies, the transaction also offers a mechanism to unlock value from existing midstream infrastructure while retaining exposure to the underlying assets through long-term operating arrangements.
