Gas transportation, distribution and storage
This is the first time the DSRA guarantee has been deployed in Nigeria and provides a more efficient method of financing the DSRA than trapping cash. By releasing the cash, Accugas was able to complete the construction of its pipeline and it also provided much needed dollars to ensure timely debt service to the local banks. The transaction involved five local Nigerian banks and these have all seen how GuarantCo has structured the transaction which should help build capacity.
Accugas is the sole supplier of gas to over 1GW of power generation and to the UNICEM cement plant which produces over 5 million tonnes of cement per annum. It is therefore a significant core infrastructure requirement for Nigeria and supports a stable gas supply network in the Niger Delta region, which is critical for helping Nigeria return to economic growth and giving nearly a million people access to improved service levels.
Domestic gas for electricity generation is a priority sector for Nigeria. Only 9 percent of Nigeria’s gas production is currently being used for power generation, which is less than the amount being flared and about a fifth of the amount being exported. This is largely due to the lack of gas processing and transportation infrastructure.