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Afreximbank signs project preparation financing with UTM Offshore

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The African Export-Import Bank (Afreximbank) has announced the execution of a Project Preparation Facility Financing Terms and Conditions with UTM Offshore Limited (UTM), under which the bank will part-finance activities to advance a floating liquefied natural gas (FNLG) project in Nigeria to bankability.

The agreement marks Afreximbank’s continued support in leading UTM’s fundraising efforts to secure the investments needed to implement the projects. This project is of historical significance as it is the first FNLG project developed by an African company on the continent, Afreximbank said in a statement yesterday.

UTM is undertaking the development, design and construction of an FLNG facility with a nominal liquefied natural gas (LNG) production capacity of 1.2 million metric tons per year and a storage capacity of 200,000 cubic meters, as well ancillary facilities located 60 km from the shore in Akwa Ibom State, Nigeria.

Afreximbank said the project aligns with Afreximbank’s strategic objective to advance businesses that have strong climate finance credentials. The project would pave the way for a just energy transition in line with the reduction of carbon emissions prescribed by COP26.

Afreximbank said the project has the potential for economic transformation – by establishing trade-enabling infrastructure that will enable Nigeria to transition from a crude oil export-based economy to a gas-based transformational industrial economy. that will unlock significant development impacts.

To drive forward the timely implementation of the project, Afreximbank leverages its diverse product line to provide end-to-end solutions. During the pre-investment phase, the project preparation facility will be deployed to de-risk the project and move it rapidly towards bankability.

In addition, under the PPF, the Bank will be appointed Mandated Lead Arranger (MLA) and responsible for syndicating the debt raising – with the ability to incorporate credit enhancements, if required. Through its financial advisory mandate, Afreximbank was instrumental in structuring the transaction to ensure optimal returns and debt sizing, as well as in identifying equity investors to invest in the project. on favorable terms.

Afreximbank’s Executive Chairman for Business Development and Corporate Banking, Mr. Amr Kamel, said, “Afreximbank’s intervention will help Nigeria, one of its member states, to invest in the natural gas as part of its path towards a just energy transition and to achieve 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 in its member countries. It is through such interventions that we can trigger transformative actions that will boost industrialization and export development activities across the continent.”