The African Export-Import Bank (Afreximbank) on Monday announced the raising of its reserve-based lending facility to Oando Oil Limited to $375 million.
In 2019, Oando secured a $525m financing facility from the bank to support its operations.
By 2024, after successfully paying back and reducing the loan to about $100m, a significant headroom was created for refinancing the facility with additional $275m to enhance the company’s financial flexibility.
The refinancing of the facility was facilitated by Afreximbank, with the support of Mercuria Asia Resources PTE Limited (Mercuria).
The deal marks a significant step in Oando’s strategic capital management in support of its ambition to increase its crude oil production capacity by 100,000 barrels per day and 1.5 billion standard cubic feet of gas per day by the end of 2029, effectively boosting Nigeria’s overall oil output and reinforcing the country’s position in the global energy market.
Also, the deal is expected to help drive local economic growth, by creating jobs, improving infrastructure development, and fostering technological advancements in Nigeria’s oil and gas sector.
The Group Chief Executive, Oando PLC and Executive Chairman, Oando Energy Resources, Wale Tinubu, said the completion of the deal represents a strategic milestone that reinforces the company’s commitment as the operator of the Oando-NEPL JV to maximizing the value of its expanded asset portfolio.
“Our Joint Venture holds extensive reserves with the potential to generate over $11 billion in net cash flows to Oando over the assets’ life. This working capital facility is a critical enabler towards efficiently extracting and monetizing these resources. We appreciate the continued partnership of Afreximbank and Mercuria, whose unwavering support underscores their alignment with our long-term focus on maximizing production, optimizing asset performance, and delivering sustainable value to all stakeholders,” Tinubu said.
The Executive Vice President, Global Trade Bank of Afreximbank, Mr. Haytham Elmaayergi, described the transaction as a critical step in advancing Afreximbank’s strategy for promoting local content in Africa’s oil and gas sector.
He said Afreximbank remains a longstanding financial partner to Oando PLC and its affiliates and has consistently supported the company’s growth and expansion initiatives.
“We are delighted that Mercuria, one of the world’s largest independent energy and commodities groups and one of our partners, has brought its global expertise and financial backing to the transaction, further strengthening Oando’s ability to execute its production growth strategy,” he added.
