Oando Gas and Power Limited, a subsidiary of Oando plans to raise $1billion to implement some short to long term projects it has lined up, The Nation has learnt.
The cash may not come from local financial institutions. According to the Managing Director of the company, Mr. Bolaji Osunsanya, the money will be used for several projects lined up for execution by the firm.
Apart from the construction of a 20 million standard cubic feet per day (mscf/d) mini LNG facility, the firm is planning in partnership with the Nigerian Gas Company, it plans to expand its gas projects to other parts of Africa starting with Ghana, Gambia and Senegal and enter into bigger power projects of about 50megawatts (Mw), among others.
Osunsanya noted that the funds would be raised in partnership with Helios – a private equity fund, and OGP, the major partner. Both firms would embark on road shows for the fund raising, he added.
He said: “The $1 billion we are talking about is what we have come to think is the requirement for the projects we scoped and it is our own equity requirement in those projects. We will need more than a billion dollars but as you know we raised about $400 million as OGP in the projects that we have done. A lot of project financing we do, we go banks and they give us money. The scheme will still be similar. We need to be able to reach international funds partner with us on this project.’’
He continued: “The fact that Helios is there means we will be able to reach international financial institutions. That is the strategic side of the deal with a private equity fund, to prepare ourselves for capital risk. A lot of it will not be local. We have taken all we can take locally and know now the capital raise will be foreign. In May we are going on road show with Helios for the project schedule.
“I think it is important for us to increase the volume of gas that passes through our system. We intend to raise it to 70mscfd coming from as low as 47mscfd in 2016. So we are looking for 25 per cent growth in the coming year. We will complete the two projects we have on hand in the Greater Lagos IV, and the Central Horizon in Port Harcourt.
“We have continued to grow our business in Port Harcourt with the Trans Amadi grid, we are expanding that now with a 9km addition that will take us to the port area. Our primary target there will be the BUA sugar refinery, which will be a big consumer of gas. But more importantly, we are trying to expand the Rivers State grid not just to Trans Amadi but to the entire emergent industrial clusters in Rivers State. It will see us go to Chioba, Obagua and all the developing parts of Port Harcourt. The idea is that the grid in Port Harcourt will be akin to the grid in Lagos and it will be our intention to continue to do this in all the emergent cities in Nigeria.”