By Bassey Udo
African Export-Import Bank (Afreximbank) and Heirs Energies Limited have announced a landmark $750-million financing partnership to optimise Heirs Energy’s potentials.
The facility would not only boost the company’s capital structure and unlock critical liquidity, but would also support its working capital requirement as it pursues its ambitious field development programme in the oil and gas sector.
Afreximbank said the investment of the facility in Heirs Energy operations is expected to significantly transform Nigeria’s domestic energy capacity as demand rises.
President and Chairman of the Board of Directors of Afreximbank, Dr. George Elombi, and the Chairman of Heirs Energies Limited, Mr. Tony O. Elumelu, signed the dual-tranche senior secured reserve-based lending facility in Abuja.
Elombi said the facility would support Heirs Energies’ accelerated growth strategy as the company enters a new phase of expansion seeking to increase, and sustain its oil and gas production capacity.
Afreximbank was appointed the Mandated Lead Arranger, Facility Agent, and Security Agent under the financing seen as an important milestone in strategic collaboration between Afreximbank and Heirs Energies.
Following the signing, Dr. Elombi highlighted the partnership as a testament to Afreximbank’s commitment to value creation and the empowerment of African entrepreneurs.
“Without investments, such as the one being provided to Heirs Energies, many fossil fuel-dependent African economies would face dire economic challenges,” Dr. Elombi said.
“Our aim, among others, is to empower the African entrepreneur. Our core strength is in the value of the partnerships we continue to forge,” he added.
He lauded Mr. Elumelu’s steadfast support for Afreximbank’s activities, adding that such partnerships have been instrumental to helping position Afreximbank as a significant cog in unlocking Africa’s economic transformation and other goals.
The President reaffirmed Afreximbank’s determination to see the African Energy Bank project to fruition, saying, “we should get to higher strides and get the Energy Bank so we can move most of the energy portfolio there. We will put tremendous capital in it to be as bold and as innovative as Afreximbank”.
Dr. Elombi said Afreximbank was willing to work with Heirs Holdings and its affiliated companies to expand to other West African countries, such as Ghana and Côte d’Ivoire, and to other parts of the continent.
“Our aim is to spread and support the domination of the African brand across Africa,” he said.
The Chairman, Heirs Energies Limited, Mr. Tony O. Elumelu, described the transaction as a powerful affirmation of what African enterprise can achieve when backed by disciplined execution and long-term African capital.
“It reflects the successful journey Heirs Energies has taken – from turnaround to growth – and reinforces our belief in African capital working for African businesses. This is Africa financing Africa’s future,” he said.
Elumelu said Heirs Energies plays a pivotal role in Nigeria’s oil and gas industry, where crude oil remains a resource of critical national and international importance.
The partnership between Afreximbank and Heirs Energies Limited dates to 2021, when the company, then known as Heirs Oil & Gas, completed its landmark acquisition of a 45 percent participating interest in the OML 17 Joint Venture with a $1.1billion transaction financed by a consortium of international and local banks led by Afreximbank, marking one of the most significant indigenous energy acquisitions in Nigeria’s oil and gas sector.
Afreximbank participated with up to $250 million of that financing, underscoring its commitment to Africa’s energy sector development and its mandate to promote intra-African trade and the growth of African-owned enterprises.
Since that acquisition, the company’s crude oil production capacity has increased from approximately 25,000 barrels per day to an average of 50,000 barrels per day, in addition to significant associated and non-associated gas production.
Heirs Energies also achieved first gas from the Agbada Non-Associated Gas Plant on 21 November 2021, just months after taking over the asset which had been under construction for over 10 years under the previous operator.
Currently, Heirs Energies is the top gas supplier in the Eastern Domestic Network and supplies gas to three major power plants, collectively contributing approximately 15 percent of Nigeria’s installed electricity generation capacity.
