Africa: French group Engie is withdrawing from the continent

A page is turning for Engie in Africa. Announced in 2020 and detailed the following year, the French energy group (€57.9bn in turnover in 2021) is now refocusing its efforts in Europe, North America and Latin America, and withdrawing from the continent.

On 14 April, the Lebanese group Butec, which is active in turnkey projects and multi-technical services, announced that the sale of 17 energy services companies*, located in South Africa, Morocco, Nigeria, Côte d’Ivoire and Burkina Faso, had been finalised at the end of March.

A $200m portfolio

Butec, which is based in the UAE, had declared at the end of December 2021 that it had reached an agreement paving the way for this acquisition. We contacted the French group, headed by Catherine MacGregor since the beginning of 2021, but it did not wish to comment.

Although the amount of the transaction remains confidential, Ziad Younes, the CEO of Butec, which is present in the Middle East, the Gulf countries and only one country in Africa (Algeria), indicates that the activities taken over represent a turnover of $200m and 1,500 employees.

“The transaction is financed from equity and Butec’s balance sheet, which has been making a positive profit on a permanent basis for nearly ten years, including during the Covid years,” he said, stressing that Engie will be replaced by the Butec brand.

A +20-year relationship

Founded in 1964 in Beirut by the Younes family, the group, of which IFC, a subsidiary of the World Bank dedicated to the private sector, is a seven per cent shareholder, is thus diversifying geographically, as it is hoping that Africa will provide more than half of its activities over the next three years.

“Butec has been working with Engie, via the former Suez and Degrémont, for over 20 years. We have built many water treatment plants together in the Middle East and Gulf,” said its boss, highlighting a takeover plan that “ensures the sustainability of all the subsidiaries and an intention to continue their industrial integration.”

The Lebanese group had several competing offers, but mainly from local players that were only interested in a group of subsidiaries and not the whole portfolio.

Refocusing on four businesses

Engie sees this operation as part of a global plan to sell assets so that it can refocus the group on four businesses (renewable energies, energy solutions, infrastructure, thermal production and energy supply) and drastically reduce its geographical footprint, from being present in 70 countries in 2018 to less than 30 by 2030.

At the end of 2021, the group reported €9.2bn of committed or completed divestments and expected to recover at least €11bn between 2021 and 2023. Between now and the end of 2022, it must in particular finalise the sale of Equans, which brings together the activities it wants to divest in Europe, to Bouygues.

In Africa, Engie is still actively managing and developing solar power plants and wind farms. Its renewable energy supply offer (mini-grids, domestic systems, etc.) and energy services are developed by the Engie Energy Access entity, which is headed from Belgium by Gillian-Alexandre Huart and recently signed contracts in Nigeria, Gabon and Uganda.

* Thermaire, Ampair, Ampair Engineering, Ampair Maintenance KZN and Ampair Maintenance Western Cape in South Africa; Engie Services Algeria; Ampair Maintenance Botswana; Tieri Burkin in Burkina Faso; Engie Services Côte d’Ivoire and Afric Power in Côte d’Ivoire; Engie Ghana Ltd; Engie Services Maroc, Cofely Contracting Maroc, Cofely Tanger in Morocco; Improvair Mozambique Limitada; Tieri Niger in Nigeria and finally IES Swaziland.