Casablanca – Sound Energy, the Tendrara gas concession holder, announced on Thursday that it reached an agreement with Attijariwafa Bank to arrange debt financing for its gas project in eastern Morocco.
The British firm, which is listed on the London Stock Exchange, said in a statement that it has approved Attijariwafa Bank’s plan to set up a long-term senior loan facility of approximately $250 million with a maximum duration of 12 years (about $2.25 billion).
Sound Energy and Attijariwafa Bank have agreed to an eight-month exclusivity term.
According to this press release, the funds obtained will be used to partially finance phase 2 of the TE-5 Horst field development in the Tendrara concession, which is estimated to cost MAD 3 billion ($330 million).
The goal of this financing is to contribute to the construction of the concession’s gas infrastructure.
“Today’s announcement confirms the support Sound Energy has with local financiers to undertake the Tendrara pipeline project development,” Graham Lyon, Sound Energy’s Executive Chairman, quoted in the release.
“Attijariwafa bank is a leading bank in Morocco and has provided Sound Energy with a compelling case to seek to provide the majority of Project Finance for the development,” Lyon added, noting that this agreement is a “significant step towards reaching a Final Investment Decision.”
Read also: Sound Energy: Tendara Concession ‘is Now Fully in Force’
The company has also indicated that it will consider the additional funding possibilities before issuing its final investment decision (FID) by the end of the year.
Earlier this month, Sound Energy raised $5 million for the construction of a 120 km pipeline that will connect to the Maghreb-Europe Gas Pipeline (GME).
It has pledged to deliver up to 350 million cubic meters of natural gas per year to the Maghreb-Europe Gas Pipeline over a ten-year term.
On March 15, the National Office of Hydrocarbons and Mines (ONHYM), the owner and operator of the Maghreb-Europe pipeline, sanctioned the connection of the Tendrara producing concession to the GME through a new 120-kilometer pipeline.
This laid the groundwork for the final investment decision on Phase 2 of the Tendrara producing concession.
