Afreximbank has executed has sealed a contractual deal with UTM Offshore to partially finance a floating liquefied natural gas (FLNG) project in Nigeria.
In a report last Friday, Offshore Energy said in the deal, UTM Offshore is leading the development of Nigeria’s first Floating Liquefied Natural Gas (FLNG) in collaboration with LNG Investment Management Services, a department of Nigerian National Petroleum Company Ltd.
The facility will use the resources from the Yoho gas field owned by ExxonMobil and the NNPC. In addition, this FLNG will be the first such project developed by an African company on the continent, the Offshore energy report said.
On 7 July, Afreximbank announced its execution of a project preparation facility financing head of terms with UTM. Under this, the bank will part-finance activities designed to progress the 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.
The FLNG facility will have a nameplate production capacity of 1.2 million metric tonnes per annum and a storage capacity of 200,000 cubic metres, as well as ancillary facilities to be located 60 kilometres from the shore of Akwa Ibom state in Nigeria.
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.
To advance the implementation of the project, Afreximbank says it 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.
Afreximbank executive vice-president, 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.”
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