West African oil and gas sector operator A-Z Petroleum has signed a US$80mn dual-tranche loan and credit facility with the African Export-Import Bank (Afreximbank).
The loan will be used to boost the company’s petroleum products manufacturing and distribution capacity.
The first tranche of the facility is structured as a US$30mn five-year term loan to finance the company’s expansion activities in Ghana, with the importation of a lubricant blending plant and a plastic-making equipment and the construction of a 40-metric tonne tank farm. The second tranche, a US$50mn standby letter of credit facility, is for the importation of petroleum products under supply contracts between A-Z Petroleum and approved sellers.
Afreximbank is the arranger, agent, security trustee and issuing bank for the facility, while Nigeria’s Diamond Bank is the designated local administrative agent and risk participant. A-Z Petroleum (Ghana) is the corporate guarantor and Ace Audit & Expertise Nigeria is the collateral manager.
Jean-Louis Ekra, President of Afreximbank, said during the signing ceremony at the Bank’s Headquarters in Cairo that the transaction demonstrated the institution’s continued commitment to championing the promotion of trade across Africa in line with its trade finance and development mandate.
“We are providing this facility in a bid to deepen and broaden our support to Nigeria, Ghana and the African petroleum sector,” said Jean-Louis Ekra, president of Afreximbank, at the signing ceremony.
Chika Okafor, chairman of A-Z Petroleum, said that the transaction marked the beginning of a new relationship between Afreximbank and the Chicason Group, of which A-Z Petroleum is a subsidiary, as it opened up enormous opportunities for the bank to work with the group.