SEVEN Energy International Limited and its wholly-owned subsidiary, Accugas, Tuesday, signed a $225 million syndicated medium-term facility with five financial institutions in Nigeria.
FBN Capital acted as the global facility coordinator in the pact, which also involved First Bank of Nigeria Limited, First City Monument Bank Plc, Stanbic IBTC and the United Bank for Africa Plc (UBA).
The signing of the deed of amendment and restatement agreement, which took place in Lagos, would enable Accugas, a gas processing, marketing and distribution company to refinance an existing $55 million debt secured for the Akwa Ibom gas pipeline project.
Part of the balance of $170 million would be utilised for financing the cost of expanding the company’s gas processing facilities and building of new gas pipeline for supply of gas to the Calabar National Integrated Power Plant (NIPP).
Speaking on the transaction, the Chief Executive Officer, Seven Energy, Mr. Philip Ihenacho, said the Calabar project was the second phase in Accugas’ gas processing and distribution development programme aimed at bringing the substantial gas reserves from the South East Niger Delta to market to meet the growing energy demand from power plants and industrial users in the region.
He said, the new pipeline project, which involves the construction of a 37km gas pipeline from the Uquo gas field in Akwa Ibom State to Oron for delivery of 131 million metro standard cubic feet per day (mmscfpd of gas to the 560MW power plant in Calabar is expected to be completed in July 2014.
He commended the financial institutions for their commitment, saying, “What has happened in the last few years in Nigeria is that there has been major reform in the power sector and there have been huge move towards making all the pieces of the chain work so that people can start to invest in the power sector”.
“We are beginning a new journey where private sector capital shares the load with government in trying to get Nigeria to where it should be. We have got the gas molecules in the ground, we have the consumers who need the gas and what we need is the infrastructure. That is what Accugas is all about.”
On his part, Managing Director/Chief Executive Officer, FBN Capital, Mr. Kayode Akinkugbe, said that the transaction showed the capacity of Nigerian banks to structure project finance deals.
“The facility has a pay-back period of seven years. It is a big message to other players in the power sector. So it sets a precedent for others to follow. Nigeria has a lot of gas and we need to tap into it,” Akinkugbe added.