Afreximbank says it has signed a project preparation facility with UTM Offshore Ltd (UTM) to progress a Floating Liquefied Natural Gas (FLNG) project in Nigeria.
This is contained in a statement issued by Afreximbank’s Press Office yesterday.
According to the statement, Afreximbank is pleased to announce its execution of a project preparation facility financing head of terms with UTM Offshore Limited (UTM).
“Under this facility, the Bank will part-finance activities designed to progress a Floating Liquefied Natural Gas (FNLG) project in Nigeria to bankability.
” This deal marks Afreximbank’s ongoing support in leading UTM’s fundraising efforts to secure the necessary investment required for the projects’ implementation.
” This project is of historical significance as it is the first FLNG project developed by an African-owned company on the continent.”
The statement said UTM was undertaking the development, design, and construction of an FLNG facility with a Liquified Natural Gas (LNG) nameplate production capacity of 1.2 million metric tons per annum and a storage capacity of 200,000 cubic meters.
” There will also be ancillary facilities to be located 60km from the shore of Akwa Ibom State, Nigeria.”
It said the project aligned with Afreximbank’s strategic aim of advancing activities which boast strong climate finance credentials, as well as representing a “first” as an African-led intervention in the FNLG sector.
” Most importantly, the project paves the way for a just energy transition in line with the reduction of carbon emissions as prescribed at COP26.”
” Moreover, this project has economically transformative potential, which includes establishing trade-enabling infrastructure which will allow Nigeria to pivot from a crude oil export-based economy to a gas-based processing industrial economy.
“This will, in turn, unlock significant development impacts.”
The statement said to advance the timely implementation of the project, Afreximbank is leveraging its diverse product suite to provide end-to-end solutions.
It said during the pre-investment stage, the project preparation facility will be deployed to de-risk the project and rapidly progress it towards bankability.
“In addition, under the PPF, the bank will be appointed as mandated lead arranger (MLA) and lead in syndicating the debt raise, with the ability to incorporate credit enhancements, if required. ”
The statement said through its financial advisory mandate, Afreximbank had been playing an instrumental role in structuring the transaction to ensure optimal returns and debt sizing.
“The bank has also been identifying equity investors to invest in the project on favourable terms.”
The statement quoted Mr Amr Kamel, Afreximbank’s Executive Vice-President, Business Development and Corporate Banking, as saying: “The intervention by Afreximbank will help Nigeria invest in natural gas.
“This will help Nigeria as part of its pathway towards a just energy transition and achieve a more sustainable and climate-resilient economic development.”
Kamel said the holistic approach deployed by the bank in the UTM project was a model that Afreximbank aims to replicate across its member countries.
” It is through such interventions that we can ignite transformative actions that will spur industrialisation and export development activities across the continent”, he said.
The Afreximbank is a Pan-African multilateral financial institution mandated to finance and promotes intra-and extra-African trade.
Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialisation and intra-regional trade, thereby, boosting economic expansion in Africa.