$300m energy trade finance portfolio to be launched

first_img BRICS TAGSFederated InvestorsInternational Islamic Trade Finance CorporationIslamic Development Banktrade finance Previous articleA metering journey, from traditional to smart pre-paymentNext article4 Priorities to accelerate energy transformation, IRENA Nicolette Pombo-van ZylAs the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention. UNDP China, CCIEE launch report to facilitate low-carbon development Finance and Policy Generation Low carbon, solar future could increase jobs in the future – SAPVIA Featured image: Stock US-based investment managers Federated Investors and Saudi-based International Islamic Trade Finance Corporation (ITFC) yesterday announced an agreement to launch a sovereign energy trade finance portfolio.Federated Investors and ITFC have worked together on a broad array of Islamic trade finance transactions since 2014.Gordon J. Ceresino, president and chief executive officer of Federated Investors, said: “After working with ITFC over the past several years, we look forward to expanding our relationship by bringing Federated’s specialised trade finance expertise, deep understanding of risk management and all the experience of Federated’s global fixed income team to investors pursuing attractive opportunities built on the highest ethical standards.”This joint initiative to create a new sovereign energy portfolio is tied to the belief that as the worldwide demand for energy continues to grow, a pool of trade-finance transactions can consistently deliver the alpha that investors seek.Energy trade finance Shari’ah compliantThe portfolio, anticipated to launch later this year, will be Shari’ah compliant with investments realised through transaction structures that rigorously adhere to Islamic principles.The ITFC Sovereign Energy Fund (ISEF) will be sponsored and managed by ITFC with strategic input from Federated Investors (UK) LLP.The portfolio will be a private offering available to ITFC’s qualified investors across the member countries of the Organisation of Islamic Cooperation (OIC) and ITFC’s global partners.It will invest primarily in energy-related trade finance, structured trade, export and import finance, supply chain financing, and project finance assets of sovereign entities across the energy value chain in OIC member countries.ISEF aims to raise $300 million for its first close.Eng. Hani Salem Sonbol, ITFC Chief Executive Officer, said: “We are pleased with our cooperation with Federated Investors. The ITFC Sovereign Energy Fund marks our first joint initiative and we are looking forward to its success in the market as it paves the way to develop other business opportunities together.”Read more: Tunisia extends deadline for solar tender by two months AFD and Eskom commit to a competitive electricity sector RELATED ARTICLESMORE FROM AUTHORlast_img read more

Power & Gas utility stocks make 29.5% loss

first_imgUtilities need to respond to rapid changes within power, gas, and commodities markets. As demand falls due to lockdown measures, there are implications on markets across the value chain. Daily Average Power Demand in Europe  BRICS (Source: European Network of Transmission System Operators for Electricity) Source: Anthony Wang, Guidehouse Insights This poses a risk to any power and gas retailer with a sizeable small commercial and industrial customer book. Careful cash flow management will be crucial while ensuring the continuance of core operations. Generation Low carbon, solar future could increase jobs in the future – SAPVIA Supply chain disruptions and workforce limitations The policy environment is changing Finance and Policy Sign up for the ESI Africa newsletter According to Anthony Wang at Guidehouse Insights, given their role in operating critical infrastructure and the regulated nature of significant portions of their revenue, utilities are generally well-prepared when it comes to anticipating disasters and managing the resulting financial turmoil. Electricity and gas revenues could be at risk  European players including ENGIE, Enel, and Iberdrola have shown leadership in their employee communication and continuity of operations efforts in response to the COVID-19 pandemic.  As supply chain frictions increase, lead times for essential components like transformers, metals, and personal protective equipment could increase by up to 60%. All of this is creating operational risk, derailing investment plans, and causing deferral of all but the most critical projects.center_img Key Challenges Affecting the Power and Gas Value Chain The combination of a pandemic-driven economic shock, an oil-price driven credit shock, and a creaking financial market are leaving no economy, region, or industry untouched. The power and gas sector is no exception. (Source: Guidehouse) AFD and Eskom commit to a competitive electricity sector A recent study has revealed that at the end of March, European power and gas utility stocks had lost 29.5% of their value compared to the start of 2020. Immediate response planningWorkforce engagement Supply chain risk assessment Cash flow management Regulatory engagement strategy  Wang adds that even the most vigilant utilities are entering unchartered territory, wherein they face four key challenges with impacts across their value chains. A mix of immediate response planning, cash flow management, and proactive stakeholder engagement will be critical to mitigating these impacts going forward. TAGSCOVID-19gasHealth and safetyUtilities Previous articleEskom’s Magoro to head up South Africa’s IPP OfficeNext articleRenewables growth slowed in 2019, says IRENA report Guest ContributorThe views expressed in this article by the author are not necessarily those of the publishers and/or association partners. While every effort is made to ensure accuracy, the publisher and editors cannot be held responsible for any inaccurate information supplied and/or published. RELATED ARTICLESMORE FROM AUTHOR A significant portion of electricity and gas revenues could be at risk due to customer liquidity issues. Governments across Europe have implemented measures to allow deferral of utility bill payments, and the European Commission has mobilized €8 billion ($8.8 billion) in financing to support small and medium enterprises and mid-caps facing existential threats. How governments respond and to what extent this impacts the power and gas sector (will we see an accelerated implementation of Infrastructure 4.0?) remains unseen. Following the EU’s announcement of a green recovery plan, renewable energy industry groups joined forces to call for the integration of stimulus packages and energy transition strategies. Similarly, New York State announced it is placing renewable energy at the core of its economic recovery strategy.  According to Wang, to proactively manage the challenges related to COVID-19 today and in the medium- to long-term, power and gas utilities need to implement a mix of the following: Travel restrictions and physical distancing measures are putting a strain on supply chains and workforce mobility. This increasingly challenges control rooms, operations facilities, and call centres where remote working can be difficult. There is also uncertainty with respect to the workforce – both in ensuring their health and safety and in accommodating flexible working arrangements, for example, in the case of international construction crews. Read more on:COVID-19Gas UNDP China, CCIEE launch report to facilitate low-carbon developmentlast_img read more