The African Export-Import Bank has approved a $200 million financing facility supporting Shoreline Power Company Limited and Arkad SpA’s participation in a major Algerian energy project.
According to World Oil, the financing relates to the Hassi Bir Rekaiz Phase 2a field development, described as one of Algeria’s largest upstream infrastructure developments.
Supporting a $980 Million Contract
The facility will support Arkad’s 44% share of a $980 million engineering, procurement and construction contract awarded by Groupement Hassi Bir Rekaiz.
The group is a joint venture comprising Algeria’s Sonatrach, Thailand’s PTTEP and Spain’s CEPSA.
The financing was approved in June and consists of two separate components. A $110 million contract finance tranche will support performance guarantees and provide working capital for the project.
A further $90 million revolving facility will finance future pipeline and energy infrastructure projects undertaken by Shoreline and its affiliates.
Raising Production Capacity
The Hassi Bir Rekaiz Phase 2a development includes the construction of a new central processing facility.
The facility is expected to increase production at the field from approximately 13,000 barrels of oil per day to between 50,000 and 60,000 barrels per day. The project is intended to strengthen Algeria’s oil and gas production capacity.
The Afreximbank announcement said the deal would also support the wider participation of African engineering and construction companies in large-scale energy projects.
Expanding African Engineering Services
The transaction is being implemented under the bank’s Engineering, Procurement and Construction Initiative.
It marks the first time the institution has financed a Sub-Saharan African contractor carrying out a major infrastructure project in North Africa.
“This transaction […] exemplifies our EPC Initiative and our Intra-African Trade Champions framework in action,” said Kanayo Awani, Executive Vice President for Intra-African Trade Finance and Export Development at Afreximbank. “By providing the US$ 200 million in structured financing, we are not only supporting Algeria’s national energy infrastructure development but also advancing intra-African trade in high-value engineering and construction services among Nigeria, Italy, and Egypt. This is precisely the kind of transaction that demonstrates Africa’s growing industrial capability and its capacity to shape its own development agenda. Afreximbank remains committed to being the financing partner of choice for African champions that are building transformative infrastructure across our continent.”
Jobs and Regional Supply Chains
The project is expected to generate approximately 6,000 jobs while strengthening regional supply chains.
It is also intended to support greater collaboration between African energy companies as development activity continues across the continent.
Alongside its contribution to Algeria’s production capacity, the financing connects a North African energy development with engineering and construction services delivered by a company from Sub-Saharan Africa. The transaction therefore combines infrastructure investment with the expansion of cross-border African commercial participation in a major energy project.
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