Afreximbank backs Oando expansion with $375m reserve-based lending facility to boost oil and gas output and drive African energy sector development

Afreximbank backs Oando expansion with a $375 million reserve-based lending (RBL) facility, boosting the company’s plans to scale up production in Nigeria’s oil and gas sector.

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The upsized facility marks a major milestone in African energy financing, allowing Oando Oil Limited to leverage proven reserves to fund its ambitious growth strategy.

In a statement released on Tuesday, the African Export-Import Bank (Afreximbank) announced the completion of the refinancing and expansion of an earlier $525 million facility, which Oando had paid down to $100 million by 2024.

This debt reduction created the headroom necessary for the upsized deal, reaffirming investor confidence in Oando’s financial discipline and operational performance.

RBL facilities allow oil and gas companies to borrow against the projected future earnings from their proven reserves.

Loan amounts are periodically reassessed based on reserve valuation and expected production levels.

The revised deal aligns with Oando’s joint venture with the Nigerian Exploration and Production Limited (NEPL), aiming to reach daily production targets of 100,000 barrels of oil and 1.5 billion cubic feet of gas by 2029.

Haytham Elmaayergi, Executive Vice President of Global Trade Bank at Afreximbank, hailed the deal as a strategic achievement.

“Afreximbank has been a long-time financial partner to Oando and continues to support its growth initiatives. We are also pleased to have Mercuria, one of the world’s largest independent energy and commodities groups, bring global expertise and financial strength to this deal,” he said.

The transaction was arranged and led by Afreximbank and supported by Mercuria Asia Resources PTE Ltd.

It is expected to contribute to job creation, infrastructure development, and technology transfer within Nigeria’s upstream oil and gas industry.

Industry observers view the partnership as a critical step in building self-reliant energy value chains across Africa.

Oando’s Group CEO, Wale Tinubu, described the upsizing as a crucial enabler for long-term value creation.

“The upsizing is a strategic milestone that reinforces our commitment to maximising the value of our asset portfolio under the Oando-NEPL JV,” Tinubu said.

“These reserves could generate over $11 billion in net cash flows for Oando over their lifecycle.”

The enhanced funding will enable Oando to pursue more aggressive drilling programmes, increase asset efficiency, and invest in the required infrastructure for gas processing and oil evacuation.

By doing so, the company aims to not only increase revenue but also support energy security in the region.

Analysts believe the transaction reflects growing confidence in Africa’s capacity to develop its own energy resources using market-driven funding mechanisms.

This type of financing structure also reduces reliance on foreign equity and promotes homegrown solutions to Africa’s energy demands.

Afreximbank’s role in this deal underscores its strategic mandate to promote intra-African trade and value-added development in key sectors.

Through similar transactions, the bank has continued to enable African firms to scale operations and retain more economic value within the continent.

“This deal showcases the power of African financial institutions stepping up to fund transformative projects,” said a Lagos-based oil and gas analyst.

“It sends a signal that African companies can lead large-scale developments with the right support.”

As Afreximbank backs Oando expansion, industry stakeholders expect similar partnerships to emerge, particularly as African producers seek to balance economic development with energy transition objectives.

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The synergy between global financial muscle and local production potential appears poised to shape the continent’s energy future.