Fez – Sound Energy, British energy firm, announced on December 29 it has secured binding conditional agreements for MAD 167 million ($18 million) of financing for the first phase of Tendrara Liquified Natural Gas (LNG) in Morocco.
The company said in a statement that as the remaining conditions prior to the LNG sales agreement announced by the company on July 29 have been lifted, the GSA LNG is now unconditional.
Sound Energy has entered into agreements with Afriquia Gas for an $18 million debt financing that will expire in December 2033. The agreements are secured with a fixed interest rate of 6% per annum.
The British energy firm said that the loan can be drawn in full or in tranches over a three-year period beginning December 24. The loan is set to develop the Tendrara production concession.
Interest will be paid quarterly, but will be delayed and capitalized semi-annually until the second anniversary of the loan agreements’ signing. Then, starting seven years after the loan agreements are signed, the payment will be made annually in equal amounts.
The loan includes a prior condition that Italfluid Geoenergy provides a gas processing and liquefaction facility, as well as verification of the Tendrara joint venture partners’ issuing of a “notice to proceed” to Italfluid.
The company‘s Executive Chairman, Graham Lyon, said the company is “delighted to have executed all loan note documentation which ensures that Sound Energy will be fully funded for its share of Phase 1 development capital.”
He explained that “this is a key milestone for the Company and we will now move forward to issuing the Notice to Proceed to Italfluid.” Lyon added that they will proceed to “draw down the initial funding from the Afriquia Gas loan in order to proceed with the execution of the Phase 1 development.”
