Helios Investment Partners has sold a 25% stake in its Nigerian gas distribution unit, Axxela, to Japan’s Sojitz Corp.
Helios is keeping a 75% stake in Axxela. A statement from Helios said this was Sojitz’s first significant equity investment in Africa, predicting future collaboration between the two.
Sojitz, it said, would help drive growth at Axxela through its expertise in gas and power infrastructure.
Investors have proved somewhat sceptical of fossil fuel investments in Africa in recent years.
However, the two companies said they both believed an “economically viable and just energy transition” in Africa required gas infrastructure. This, they said, allows a move away from higher polluting fuels, ends gas flaring and supports intermittent renewable power generation.
The statement said Axxela had helped reduce customer emissions by 1.7 million tonnes between 2018 and 2020. It achieved this by switching consumers from diesel or heavy fuel oil to gas.
Axxela supplies around 80 million cubic feet per day of gas to more than 200 industrial customers.
Sojitz’s COO of infrastructure Masakazu Hashimoto said the deal opened “the door for our entry to a gas downstream market in Africa where huge growth potential is expected”.
Hashimoto went on to say the collaboration with Helios would “create additional value to Axxela and their stakeholders by way of a disciplined investment while ESG issues are fully addressed”.
Axxela CEO Bolaji Osunsanya said the deal was “a huge testament of continued investor confidence in our business. It also further affirms our position not only as a market leader, but as a reputable partner enabling industrialisation across Africa.”
Helios bought a first 75% stake in Axxela in 2016 for $115.8 million, from Oando. It then bought the remaining 25% in 2019 for $41.5mn.
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