Swala Energy ready to invest in oil, gas
Australian Stock Exchange (ASX) listed Swala Energy is ready to invest at least $3 million (K1.2 billion) initially which is expected to rise to $30 million (K12.3 billion) in the country’s oil and gas exploration.
Swala Energy, a gas and oil exploration company established in September 2010, was listed on the ASX in April last year and has operations and subsidiaries in Zambia, Kenya and Tanzania.
In an e-mail response this week, Swala Energy Zambia chief executive officer David Ridge said their oil and gas company actively and voluntarily involves locals in their share structure.
“We recognise that the greatest value accrues to shareholders in the early exploration phase and that a reliance on foreign capital excludes locals from benefiting from the value of their national resources,” said Ridge.
Highlighting the company’s business model in Tanzania, Ridge said Swala set aside 10 percent of the original issued capital—about $2.5 million (K1 billion)—to be managed for the benefit of the communities where the company has active operations.
Swala also notes that they brought in Tanzanian investors at the early ‘seed capital’ stage where most value is created, raising $1 million (K411 million) in Dar es Salaam and resulting in the overall Tanzanian equity in the company being 35 percent.
But although oil exploration proposals have raised heated debate in Malawi, analysts have attributed heavy investments in neighbouring Zambia, Mozambique and Tanzania to the extractive industry, particularly mining, oil and gas.
According to figures provided by the United Nations Conference on Trade and Development, Malawi received $129 million worth of Foreign Direct Investment (FDI) in 2012, approximately 2.4 percent of all investments that flowed into Southern Africa.
According to the statistics Zambia raked in $1.1 billion, Tanzania $1.7 billion, Mozambique received $5.2 billion.
Reacting to this earlier, Chancellor College professor of economics Ben Kaluwa attributed the heavy FDI inflows in the countries to a vibrant extractive industry.
Experts have pointed out that there are oil and gas prospects in Lake Malawi which prompted exploration activities.
Although Malawi has lately been performing dismally in the extractive sector, analysts have tipped it to be the next big thing for the country with commercial banks, saying they are ready to finance investments in the area.
Last year, the government launched the Mines and Mineral Policy which is aimed at enhancing the contribution of mineral resources to the economy and, therefore, move from being agro to mineral based.
After launching the mines and minerals policy, government launched the mineral exploration and geo-mapping project which is expected to be finalised towards the end of this year.
