Yann is the head of the firm’s Africa Group and is global co-head of mining specialising in corporate and commercial transactions as well as major project development in emerging markets, with a focus on the energy, resources and infrastructure industries. With particular expertise in Africa (he has worked in more than 30 different jurisdictions) he has clients that include energy and mining companies, funds, sponsors and governments. He is ranked among the top 50 lawyers for work in Africa by leading African publication Jeune Afrique in 2020.
In this interview, which is part of a series of Q&As of “Sector Champions” attending the event, Yann outlines his priorities for building relationships and deepening understanding between the UK and African countries.
Following Boris Johnson’s announcement last year that the UK would end its direct support for fossil fuel projects overseas, which comes into effect on March 31, we have seen a steady decline in UK-backed oil and gas projects in Africa. This means projects such as the US$3.5 billion East Africa Crude Oil Pipeline, which UK Export Finance recently confirmed it will not have the time to approve funding for ahead of the March 2021 cut-off date, are struggling to get the financing to proceed.
This shift from governmental, institutional, and private investors and financiers from investing in or financing fossil fuels to lower-carbon energy projects has only accelerated as governments around the world look to build back greener from the Covid-19 pandemic. As financiers and investors move more of their attention towards ESG-focused investing and financing they are becoming an increasingly strategic driver of decarbonisation action. To navigate this change, fossil fuel companies are diversifying their business models to incorporate a much wider energy mix.
Despite this, we are still seeing a lot of interest in mining projects, while downstream hydrocarbon projects are becoming more attractive to investors than traditional upstream projects, with interest in gas-to-power projects remaining quite strong. For example, we are currently advising AIM-listed Chariot, the Africa focused transitional energy company, on the potential development of a gas-to-power project in Morocco.
Brexit has also led to an increase in UK investment activity into non-EU countries, including many in Africa. Foreign direct investment from the UK to Africa has certainly been boosted by the fact that the UK has managed to "rollover" trade agreements with 15 African countries to date, with arrangements with others, such as Algeria and Ghana, currently under discussion. However, there is an increased focus on diversifying UK investments in Africa, which are currently heavily focused on the mining and quarrying sectors.
Commodity prices remain relatively high, and many suggest that commodity markets, especially oil, gas, and metals, will continue to prosper throughout 2021, which will bring significant growth potential for Africa’s extractive sectors.
Through the global energy transition and the push towards greener sources, we will also see a continued demand for minerals needed to build renewable energy infrastructure, batteries, and electric vehicles. This move towards greener, cleaner sources will also drive M&A activity as fossil fuel companies look to diversify their portfolios.
We are also seeing more intra-African trade, following the African Continental Free Trade Agreement starting on January 1. Many of these negotiations are still governed by English law, and so we are continuing to support clients as they navigate these intracontinental agreements.
Good communication and establishing a trust-based relationship is key when working with counterparts in other jurisdictions to ensure effective knowledge sharing, decision-making, coordination, and, ultimately, to achieve the best results.
Before the pandemic it was very much a matter of spending time on the ground and building these relationships with local law firms in person. However, everyone adapted quickly to the lockdowns introduced around the world, with advances in technology providing a fantastic solution to ensure people stayed connected, with the use of video calls helping to recreate an in-person experience.
It is important to recognise the role these local law firms play, both in terms of their deep knowledge of local practice and culture, but also in the strength of their client relationships and experience. Establishing strong working relationships is very much about mutual respect and recognising that the relationship is a two-way street.
Travel and engagement with other jurisdictions was part of the reason I became a projects lawyer with a focus on emerging markets.
I am lucky enough to have worked in more than 30 different jurisdictions in Africa for a variety of clients, including energy and mining companies, funds, financiers and governments. Many projects in the resources sectors involve engagement with government entities, which I thoroughly enjoy as the negotiation with governmental bodies can be fascinating.
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