The Africa Finance Corporation (AFC) has announced a US$80 million investment and role as a Joint Mandated Lead Arranger (MLA), with Access Bank, in a US$150 million senior debt syndication for a newly established Oil and Gas Company, Neconde Energy Limited, which has a focus of acquiring development assets in Nigeria and across Africa.
The loan facility will be used to finance Neconde’s acquisition of the Shell JV’s 45% interest in Oil Mining Lease 42 (“OML 42”), a currently producing asset located in the Western Niger Delta. Neconde was formed by a consortium which includes two leading companies in the upstream Oil and Gas sector, Yinka Folawiyo and Nestoil, together with VP Global, which provides direct ownership of the asset by the local community. Kulczyk Investments and Kulczyk Oil ventures, two related Polish institutions, are also partners in the venture. The completion of the acquisition is subject to final government approvals.
“Financing has been one of the primary challenges faced by indigenous companies in Africa. Given changing industry dynamics, and anticipated opening up of new acreage for exploration and development, the AFC is pleased to play a catalytical role in positioning strong indigenous companies such as Neconde for success, and creating a role model for other local companies” said AFC President and Chief Executive Andrew Alli. “We were particularly impressed by Neconde’s unique approach to local community involvement”.
Neconde Director and Shareholder, Mr. Tunde Folawiyo, welcomed AFC’s lead role in the debt financing. “We are delighted to have AFC support Neconde as an anchor investor in the acquisition of our foundation asset. We were particularly impressed by their responsiveness to the requirements of the transaction, including the quick turnaround time. We look forward to building a world class exploation and production platform through which the currently under-developed reserves of the Niger Delta could be brought into production with potential economic and social benefits for the region and country at large,” Folawiyo said.
Africa Finance Corporation (AFC) is an African led financial institution with the mission to improve African economies by proactively creating, developing and financing infrastructure, industrial and financial assets. Among other projects in which it is involved, AFC is the lead investor in conjunction with Cenpower Generation Company Limited (Cenpower), which is implementing the $450 million Kpone IPP project – a 340 megawatt combined cycle gas turbine power plant in Tema, Ghana. AFC is also the main African participant in a seven- year USD$ 750 million syndicated reserve base lending facility to develop the landmark Ghanaian Jubilee Oil Field – West Africa’s largest offshore deepwater find in over a decade.