- Infrastructure Debt Fund for financing the Construction of an initial 10,000MT LPG Storage Facility and Dedicated Jetty in Rivers State
Falcon Corporation Limited (“Falcon” or the “Company”) is pleased to announce the successful closing of a N19.41 billion facility from the Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF). The proceeds of the loan are earmarked for the development of a state-of-the-art 15,000 metric ton Liquefied Petroleum Gas (LPG) storage facility and a dedicated jetty situated in Rumuolumeni, Saipem/Aker Base Road, Port Harcourt, Rivers State, Nigeria (the “Project”).
The Project, which has reached an advance stage, is being carried out in two (2) distinct phases, with the initial phase focusing on the construction of a 10,000 metric ton spherical tank (consisting of 2 tanks, each with a capacity of 5,000 metric tons), a dedicated jetty and other associated infrastructure, which is to be followed by the development of an additional 5,000 metric tons of storage at a later date.
According to the Managing Director of the Company, Prof. Joe Ezigbo, “At Falcon, we consider our investments in the Gas industry as a national service first. This is why over the past almost thirty years, we have continued to expand our footprints within the industry, despite the various challenges within the environment. Gas development is our contribution to nation building and we remain unrelenting in this regard. We positioned our LPG facility strategically in proximity to major Gas sources and navigable water routes. The Project is set to facilitate and enhance more direct procurement and distribution of LPG, which will dramatically lower conventional delivery and storage costs. Beyond economic gains, we anticipate significant social benefits including job creation, income growth, health improvements, and environmental sustainability as our customers and communities transition to cleaner fuel options on a larger scale.”
The Deputy Managing Director and Co-Founder of Falcon, Mrs. Audrey Joe-Ezigbo, emphasized that “As a progressive company, deeply committed to the growth and advancement of Nigeria’s domestic Gas industry, we are expanding our investments across the Gas industry value chain, from our traditional role in the downstream sector, to our current midstream investments, and positioning for an intended upstream play. We are fully aligned with the nations aspirations to leverage gas for industrialization, and our primary energy transition fuel, with the strong focus on its use for power and cooking. LPG’s characteristics, such as portability, high energy value, low emissions, and reduced carbon footprint, make it an ideal choice for cooking and other industrial uses. The Project aims to ensure the availability of LPG and deepen its market penetration and adoption within the catchment areas, contributing to the mitigation of ecosystem damage and greenhouse emissions caused by use of other traditional fuels.”
As stated by Mr. Bolaji Balogun, the Chief Executive Officer of Chapel Hill Denham, “Chapel Hill Denham is pleased to support the integrated LPG infrastructure in Rivers State as this will not only increase domestic LPG consumption but also help in achieving one of the critical sustainable development goals aimed at reducing carbon emissions, air pollution, and habitat loss resulting from the use of firewood for cooking by more than 30 million households. The Project is also in line with the Federal Government of Nigeria’s objective of increasing the adoption of LPG as auto fuel and a replacement of diesel for power generation.”
Funded by debt obtained from NIDF and the Bank of Industry (BOI), coupled with internally generated funds, the Project has now hit a number of critical milestones, with a recorded completion rate of 65% as at October 2023. The progress achieved encompasses various phases of development, including completion of the jetty and substantial advancements in shoreline protection, as well as various engineering, procurement and construction (EPC) activities and installations. The Project is expected to be completed and commissioned by Q4 2024.
Nelson Walter, Falcon’s General Manager, Finance, in addressing the choice of debt provider, stated, “NIDF is renowned for providing debt financing with reasonable terms for impactful infrastructure projects. They have shown a depth of understanding of the imperatives for project success and offered a flexible long-term loan repayment structure for Falcon in alignment with this. We are extremely delighted to have partnered with NIDF on this groundbreaking Project. “
Vetiva Capital Management Limited and Chapel Hill Denham Advisory acted as the Financial Adviser on the transaction, while Detail Commercial Solicitors provided legal counsel.
About Falcon Corporation Limited
Operational since 1994, Falcon is a leading wholly indigenous integrated player across the Energy value chain in Nigeria, with expertise in delivering world class energy solutions across the midstream and downstream sectors of the industry. Falcon has made significant impact within the Nigerian domestic Gas market. The company is the licensed Local Distribution Company charged with the infrastructure build-out, distribution and supply of Natural Gas to various industrial and commercial concerns in Ikorodu, Lagos State underpinned by a Build-Operate-Transfer (BOT) agreement with the Nigeria Gas Marketing Company Limited “NGML”).
The Company undertook a strategic diversification drive into the Liquefied Petroleum Gas (LPG) subsector of the Nigerian domestic Gas market through its LPG trading and distribution activities, and the current infrastructure investment in the LPG Tank Farm and associated Jetty facility. Falcon, a world-class, value-driven, and customer-focused organization is fully positioned to become a major player in the LPG market with core responsibilities around LPG purchase, shipping, storage, transportation, distribution, and bulk supplies across Nigeria thereby enabling sustainable long-term profitability and growth. For more information please visit: www.falcon-corporation.com
About Chapel Hill Denham Nigeria Infrastructure Debt Fund
Nigeria Infrastructure Debt Fund is Nigeria’s largest and Africa’s first-ever listed infrastructure fund, providing long-term, Naira denominated financing for infrastructure projects in Nigeria. NIDF which currently has an asset under management of over NGN100 billion, enables project sponsors to avoid the unsustainable mismatches of currency and tenor between their financing and their revenues/cash flows. With the current capital base, NIDF has a diversified and growing portfolio of infrastructure loans in a broad range of sectors including power generation, energy infrastructure, transportation, telecom and social infrastructure (education and healthcare).
NIDF’s investor base includes the African Development Bank (AfDB), Nigeria Sovereign Investment Authority (NSIA) and most of the pension funds operating in Nigeria. By mobilising domestic capital for financing Nigeria’s infrastructure, NIDF has established a template that can bridge the infrastructure deficit facing not just Nigeria but in countries across Africa. For more information please visit: www.chapelhilldenham.com