Japanese firm enters Nigeria’s gas business, buys 25% stake in Axxela

In what would be the first of its kind, Tokyo-listed firm Sojitz Corporation has bought a 25 percent stake in the holding company of Axxela Group from Helios Investment Partners, in an investment that represents the first Japanese strategic foray in a downstream gas distribution business in Africa.

Helios retains a 75 percent interest in the company.

This transaction marks Sojitz’s first significant equity investment in Africa, indicating its growth ambitions on the continent and serving as a blueprint for future collaboration in Africa between Helios and Sojitz across a range of sectors, Axxela said in a release.

Sojitz is expected to bring to bear expertise in developing gas and power infrastructure projects and providing lower-carbon energy solutions to industrial customers globally.

“This transaction demonstrates the value of our strategy to build market-leading, strategically important businesses which become highly sought-after by global investors seeking to enter Africa or grow their presence on the continent,” said Ogbemi Ofuya, Partner at Helios Investment Partners.

Axxela Group is an energy infrastructure company which began operations in 2001 and currently serves over 200 industrial customers across key industrial hubs in Lagos, Port Harcourt, and Sagamu providing a comprehensive energy offering across pipeline gas, compressed natural gas (CNG) and liquefied natural gas (LNG).

It also supplies gas to power utilities and industries across the West Africa region, taking advantage of its status as a designated shipper on the West African Gas Pipeline (WAGP), a regional gas pipeline spanning across Benin, Togo and Ghana.

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The press statement indicated that Sojitz is a global energy player, with deep expertise in the gas and power infrastructure sector, where it has been involved in the development of gas distribution networks, LNG terminals and power plants globally.

Under Sojitz’s “Medium-Term Management Plan 2023”, the company aims to adopt a market-oriented initiative in growth industries and in accordance with the plan, has developed a downstream gas business in Vietnam. This know-how will enhance the Axxela Group’s operation and growth and ultimately aim to provide multiple energy solutions meeting individual customer’s requirements while contributing to CO2 reduction.

Masakazu Hashimoto, COO of Infrastructure & Healthcare Division at Sojitz Corporation, commented: “We are pleased to announce this strategic investment into the Axxela Group, which opens the door for our entry to a gas downstream market in Africa where huge growth potential is expected. Africa is the largest frontier in the 21st century.

“This transaction embodies our “market-oriented initiative” and “co-creation and sharing methodologies” and begins a partnership between the internationally reputable fund Helios and Sojitz. We expect that this collaboration will create additional value to Axxela and their stakeholders by way of a disciplined investment while ESG issues are fully addressed.”

Bolaji Osunsanya, CEO of Axxela Limited, said “with Sojitz onboard, our capacity is stronger, and we are better situated to attract the requisite capital to continue executing our development-oriented projects.’’