Nigeria Targets $11.4bn Export Proceeds From UTM Offshore FLNG Project

The African Export-Import Bank (Afreximbank) has executed a project preparation facility financing head of terms with, UTM Offshore Ltd, under which the bank will part-finance activities designed to progress a Floating NLG, FLNG project in Nigeria into bankability.

According to executive vice-president of Afreximbank, Amr Kamel, the project is estimated to generate exports at a minimum of $11.4 billion from Nigeria to the rest of the world, in the process, creating over 2,000 construction jobs and a minimum of 1,000 high-quality jobs.

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 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 an LNG nameplate production capacity of 1.2 million metric ton per annum and a storage capacity of 200,000 cubic meter as well as ancillary facilities to be located 60 km from the shore of Akwa Ibom State, Nigeria.

The bank said, this project has economically transformative potential, establishing trade-enabling infrastructure that 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.

Afreximbank will 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 toward bankability. In addition, under the PPF, the bank will be appointed as mandated lead arranger and lead in syndicating the debt raise, with the ability to incorporate credit enhancements, if required.

UTM is undertaking the development, design, and construction of an FLNG facility with a Liquefied Natural Gas (LNG) nameplate production capacity of 1.2 million metric tons 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.

Representing a ‘first’ in the African FLNG sector for UTM’s ownership, this intervention aligns with Afreximbank’s strategic aim of advancing activities, which boast of strong climate finance credentials and accelerate the development of energy transition solutions, in line with the reduction of carbon emissions prescribed at COP26.

The project has economically transformative potential – establishing trade-enabling infrastructure, which will allow Nigeria to ensure the monetisation of its natural resources and pivot from a crude oil export-based economy to a gas-based processing industrial economy.

Kamel said: “to support this project throughout its journey along the project finance value chain, 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 towards de-risking the project and rapidly advancing it towards bankability.

“In addition, under the PPF, the Bank will be appointed as MLA and lead in syndicating the debt raise – with the ability to incorporate credit enhancements if required. Through its Financial Advisory Mandate, Afreximbank has been playing an active role in structuring the transaction to ensure optimal returns and debt sizing, as well as identifying equity investors to invest in the Project on favourable terms.”

The managing director/CEO of UTM Offshore Limited, Mr. Julius Rone, said the participation of the bank in the project’s preparation stage will play a significant role in de-risking this landmark activity being promoted by UTM Offshore, fast-tracking the fund-raising process and project implementation.

African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade.