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HomeBusinessAfreximbank to finance Floating Liquefied Natural Gas project in Nigeria

Afreximbank to finance Floating Liquefied Natural Gas project in Nigeria

By Onu Okorie

African Export-Import Bank Afreximbank is pleased to announce its execution of a project preparation facility financing head of terms with UTM Offshore Limited UTM, under which the Bank will part-finance activities designed to progress a Floating Liquefied Natural Gas FNLG project in Nigeria to bankability. This was revealed in a statement yesterday in Abuja.

Speaking on the development, the Executive Vice-President in charge of Business Development and Corporate Banking, Afreximbank Mr. Amr Kamel said, “The intervention by Afreximbank will help, Nigeria, one of its member states, to invest in natural gas as part of its pathway towards a just energy transition and achieve a more sustainable and climate resilient economic development.”

“The holistic approach deployed by the Bank in the UTM project is 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 industrialization and export development activities across the continent”.

The 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 FNLG project developed by an African-owned company on the continent.

UTM is undertaking the development, design, and construction of an FLNG facility with a Liquified Natural Gas LNG nameplate production capacity of 1.2 million metric ton per annum and a storage capacity of 200,000 cubic meters, as well as ancillary facilities to be located 60km from the shore of Akwa Ibom State, Nigeria.

As well as representing a “first” as an African-led intervention in the FNLG sector, the project aligns with Afreximbank’s strategic aim of advancing activities which boast strong climate finance credentials. 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 – establishing trade-enabling infrastructure which will allow Nigeria to pivot from a crude oil export-based economy to a gas-based processing industrial economy in turn unlocking significant development impacts.

To advance the timely implementation of the project, Afreximbank is leveraging its diverse product suite to provide end-to-end solutions. 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.

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