Societe des Hydrocarbures Du Tchad Complete Acquisition of Stake in Doba Consortium via Africa Finance Corporation
The Africa Finance Corporation (“AFC”) is a Mandated Lead Arranger of a US $1.305 billion pre-payment facility for Glencore Energy UK (“Glencore”). The facility will be used by Glencore to provide financing of up to US $1.450 billion to Societe des Hydrocarbures du Tchat (“SHT”), the National Oil Company of Chad. The pre-payment facility will, in turn, be used by SHT to acquire Chevron Global Energy Inc’s. (Chevron’s), 25% participating interest in the Doba consortium, which owns and operates oil producing assets in Chad.
This transaction increases Glencore’s access to crude-oil (a major traded commodity) and given its pedigree as a successful trading entity, Glencore will be able to profitably leverage from the offtake agreement with SHT Chad. The Doba Consortium owns and operates the Doba Consortium petroleum assets in Chad, together with the pipeline companies responsible for transporting crude oil to Cameroon for export. The Consortium comprises ExxonMobil Corporation (ExxonMobil), Chevron, and Petroliam Nasional Berhad (Petronas). The field is operated by ExxonMobil.
AFC was one of the six Mandated Lead Arrangers of the pre-payment facility, the others being Credit Agricole Corporate and Investment Bank, with Citibank N.A. as the Account Bank. AFC’s contribution to the financing was US $100 million.
AFC, a multilateral finance institution, was established in 2007 with an initial capital base of US $1 billion, to be a catalyst for private sector infrastructure investment across Africa. AFC was established to help fill a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector-led investment in the core infrastructure sectors of power, natural resources, heavy industry, transport and telecommunications.
The team at AFC was led by Taiwo Adeniji, Director, Financial Institutions & Advisory Services who drove the process of securing AFC’s first investment in Chad (a member country of the AFC since October 2012). The team comprised of individuals with varied areas of specialisation and included Nana Eshun (Senior Vice President and Lead Counsel), Osam Iyahen (Senior Vice President, Natural Resources), and Associates, Ufuoma Adasen and Titilayo Oke.
Mandated Lead Arranger
Andrew Alli, President & Chief Executive Officer, commented:
“We are particularly pleased to be able to finance our first project in Chad, a member country of the AFC since 2012. This investment represents a continuation of our strategy to support the indigenisation of Africa’s oil and gas sector through the provision of finance for the acquisition, or development of assets by local entities. By providing finance for Glencore’s pre-payment facility, AFC is ultimately supporting the industrial and economic development of the Republic of Chad.”