AFC Commits €50m to Senegal’s Sangomar Oil Field

Africa Finance Corporation (AFC) will invest €50 million in Senegal’s Sangomar oil field to fund its first phase of development towards first oil, as the country builds its emerging oil and gas industry.

The project is located 100 kilometres southwest of Dakar and covers 7,490 square kilometres. The field is estimated to contain about 500 million barrels of crude oil.

The investment is expected to help Senegal generate more government revenue through taxes and royalties, create jobs for local workers and improve energy security by reducing dependence on imported oil and gas.

The partnership involves AFC and the Government of Senegal. AFC said its funding would support development of the landmark field as the country works to establish itself as a regional oil and gas hub.

Sangomar funding tied to first oil

The €50 million will finance the first phase of development needed to achieve first oil, described as a major milestone for Senegal’s hydrocarbons sector.

AFC President and Chief Executive Officer, Samaila Zubairu, said the corporation expected the Sangomar project to have a major effect on Senegal and its people.

“We are pleased to support the development of the Sangomar field which we expect to have a transformative impact on the Republic of Senegal and its people though the reduction of import reliance, the generation of increased government revenues, the creation of local jobs and an overall contribution to accelerated industrialisation and economic development,” Zubairu said.

The project is expected to give the Senegalese government new revenue through taxes and royalties from oil production.

It is also expected to provide jobs for local workers and help reduce the country’s reliance on imported oil and gas.

The field’s size and estimated crude reserves give the project a major place in Senegal’s plans for its oil and gas industry.

The development is also tied to the country’s ambition to become a regional hub for oil and gas.

AFC’s Senegal investment record

AFC has financed several major projects in Senegal since the country became a member of the corporation in 2019.

Its previous work includes the 300-megawatt combined-cycle gas power project at Cap des Biches, which is Senegal’s largest Independent Power Project.

The corporation has also financed road construction and rehabilitation through Fonds d'Entretien Routier Autonome, known as FERA.

AFC has provided funding to Senegal’s Ministry of Economy and Finance for projects including the 128-megawatt Sambangalou Hydropower Dam in the Kedougou region.

It has also financed the procurement of petroleum products used for power generation in the country.

AFC also has investments in renewable energy in Senegal. The corporation acquired Lekela Power with Infinity Power, creating Africa’s largest renewable energy platform, according to the supplied information.

The platform operates 1.3 gigawatts of solar and wind projects in South Africa, Egypt and Senegal. It also has a 1.8-gigawatt project pipeline at different stages of development.

AFC was established in 2007 to support private sector infrastructure investment in Africa. It provides financial and technical advice, project structuring, project development and risk capital.

The corporation has 40 member countries and has invested US$11.5 billion across Africa since its establishment.

The immediate focus of the new investment is the development of Sangomar towards first oil, with the project believed to provide new oil revenue, local jobs and less reliance on imported oil and gas.