The African Export-Import Bank (Afreximbank) says it has completed the upsizing of its reserve-based lending (RBL) facility for Oando Oil Limited to $375 million.
Reserve-based lending is a type of financing for independent exploration and production companies, in which the value of oil and gas reserves determines the quantity of a lending facility accessible to the borrower.
In a statement on Tuesday, Afreximbank said Oando had paid down the original $525 million facility to $100 million in 2024.
The bank said this created room for refinancing and bolstered the company’s financial flexibility.
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According to the statement, the upsized facility, led by Afreximbank with backing from Mercuria Asia Resources PTE Limited, represents a key step in Oando’s capital strategy.
The lender said it is expected to support the company’s goal of reaching 100,000 barrels of oil and 1.5 billion cubic feet of gas per day by 2029.
Afreximbank said the transaction also aims to boost Nigeria’s oil production, strengthen its role in the global energy market, and drive local economic development through job creation, infrastructure improvement, and technological progress in the oil and gas sector.
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Wale Tinubu, group chief executive officer (GCEO), Oando Plc, expressed pleasure at the upsizing, describing it as “a strategic milestone that reinforces our commitment as Operator of the Oando-NEPL JV to maximizing the value of our 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,” he said.
“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.”
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Also commenting, Haytham Elmaayergi, executive vice-president (EVD), Global Trade Bank, Afreximbank, said the transaction represents a key step in the bank’s commitment to enhancing local content in Africa’s oil and gas industry.
“Afreximbank remains a longstanding financial partner to Oando PLC and its affiliates and has consistently supported the company’s growth and expansion initiatives,” the EVD said.
Elmaayergi said he was delighted that Mercuria brought its global expertise and financial backing to the transaction, further strengthening Oando’s ability to execute its production growth strategy.
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