AGPC raises US$260m to complete ANOH project and drive energy transition in Nigeria
Mordi chukwunonso Esther
Seplat Petroleum Development Company Plc a leading Nigerian independent energy company listed on both the Nigerian Stock Exchange and the London Stock Exchange has announced that its Incorporated Joint Venture (“IJV”), the ANOH Gas Processing Company (“AGPC”), has successfully raised US$260m in debt to fund completion of its ANOH Gas Processing Plant (“ANOH”).
The 300MMscfd capacity ANOH plant, located on OML 53 in Imo State, is being built by AGPC, which is an IJV owned equally between Seplat and the Nigerian Gas Company (“NGC”), a wholly owned subsidiary of Nigerian National Petroleum Corporation (“NNPC”). Seplat and NGC have previously provided a combined US$420m in equity funding and the project is now fully funded.
The US$260m funding was provided by a consortium of seven banks: Stanbic IBTC Bank Plc (advisor), United Bank for Africa Plc, Zenith Bank Plc, FirstRand Bank Limited (London Branch) / RMB Nigeria Limited, The Mauritius Commercial Bank Limited, Union Bank of Nigeria Plc and FCMB Capital Markets Limited. It allows for an additional US$60m accordion at the time of completion to fund an equity rebalancing payment at that time, if considered appropriate. Funding commitments of more than US$450m were received by the company, which is a significant oversubscription and a strong sign of confidence in the project.
Following a cost optimisation programme, the AGPC construction cost is now expected to be no more than US$650m, inclusive of financing costs and taxes, significantly lower than the original projected cost of US$700m.
ANOH is one of Nigeria’s most strategic gas projects. It will help Nigeria to accelerate its transition away from small-scale diesel generators to cleaner, less expensive fuels such as natural gas for power generation. Seplat is a leading provider of natural gas to Nigeria’s power sector, supplying around 30% of gas used for electricity generation.
Okechukwu Mba, Managing Director of ANOH Gas Processing Company said: “Successfully closing the US$260 million debt facility means that the ANOH project is now fully funded. Once operational, AGPC will be a significant supplier of gas to Nigeria’s power sector, supporting local employment and the cleaner generation of power for Nigerian homes and businesses. We conservatively estimate that the gas from AGPC will be enough to generate electricity for more than 5 million people.”
On his part, Roger Brown, Chief Executive Officer of Seplat, posited that “completing the funding of ANOH is an important milestone for AGPC. The ANOH development is one of the government’s Seven Critical Gas Development Projects and our involvement provides a clear path towards strengthening Seplat’s position as Nigeria’s leading indigenous diversified energy producer. It will help us drive, alongside our government partners, Nigeria’s transition to cleaner, less expensive power generation. We are extremely proud to partner with the Nigerian Gas Company in this strategically important project, which will create jobs and prosperity in the Nigerian economy.
Seplat will continue to diversify its business and invest in gas to help Nigeria develop its own natural resources, which in turn will drive more sustainable social and economic growth for a young, rapidly growing population.”