ICBC contributes to $3 billion loan for the Nigeria LNG Complex Train 7 Expansion Project (Linked to Project ID#92104)

On May 13, 2020, Nigeria LNG Limited (NLNG) — a special purpose vehicle and joint venture of Nigerian National Petroleum Corporation (49% equity stake), Shell (25.6% equity stake), Total (15% equity stake), and Eni (10.4% equity stake) — signed a $3 billion debt financing package with a syndicate of banks for the Nigeria LNG Complex Train 7 Expansion Project. The debt financing package consisted of a $1.5 billion covered tranche with Korea Trade Insurance Corporation (KSure), the Korea Export-Import Bank (K-EXIM), and SACE, and another $1.5 billion uncovered tranche with 26 International and Nigerian lenders (including Bank of China and the Industrial and Commercial Bank of China). Bank of China’s contribution is captured via Project ID#92104 and the Industrial and Commercial Bank of China’s contribution is captured via Project ID#92103. The uncovered tranche carried the following borrowing terms: a 9-year maturity, 4-year grace period, and interest rate of LIBOR plus a 3.75% margin. Lenders will rely on NLNG's balance sheet and will have no direct recourse to NLNG's shareholders. The proceeds of the loan are to be used by the borrower to finance FEED and EPC contracts, which were awarded to two separate consortia in August 2018. The purpose of the project is to add approximately eight million tons per annum of LNG at the Bonny Island LNG Complex in Nigeria. Currently six LNG trains produce an annual total of 22 million tons at the Bonny Island LNG Complex, which is expected to rise to 30 million tonnes when Train 7 is put into operation. Saipem, Chiyoda, and Daewoo E&C are the contractors responsible for implementation. NLNG Train 7 is expected to take five years to construct.

Additional details

1. The lenders were advised by White & Case. The sponsors mandated two financial advisers earlier this year: SMBC and Guaranty Trust Bank. 2. This project is also known as the Train 7 Expansion Project. 3. The borrowing institution is also known as Nigeria Liquefied Natural Gas (NLNG) Limited. 4. Nigerian National Petroleum Corporation is a state-owned oil company in Nigeria. 5. Some sources refer to the total size of the debt financing package as $2.77 billion rather than $3 billion. 6. AidData has estimated the all-interest interest rate by adding 3.75% to the average 6-month LIBOR rate in May 2020 (0.627%). 7. Two DFIs—the Africa Finance Corporation (AFC) and the African Export-Import Bank (Afrexim) — were also involved in this transaction, but their precise roles are unknown. This issue warrants further investigation. 8. The size of Bank and China and ICBC’s contributions to the $1.5 billion uncovered, syndicated loan tranche are unknown. For the time being, AidData assumes equal contributions from all 26 lenders that participated in the tranche ($57,692,307)

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