Afreximbank Backs Shoreline With $200M for Algeria Oil

Africa · Energy

Africa’s own export bank is putting US$200 million behind a Nigerian-owned contractor to help expand a major Algerian oilfield — a rare piece of South–South energy finance that ties West African capital to North African crude.

The deal in one read

The African Export-Import Bank (Afreximbank) has approved a US$200 million global revolving, dual-tranche facility for Shoreline Power Company and its co-borrowers, including Arkad, an Italian engineering firm majority-owned by Nigeria’s Shoreline Group. The money underwrites Arkad’s share of one of Algeria’s largest current upstream contracts.

That contract — worth about US$980 million — covers the engineering, procurement and construction (EPC) of Phase 2a of the Hassi Bir Rekaiz (HBR) field development in the Algerian Sahara. Arkad holds a 44% share of the work.

Who is behind the field

HBR is operated by Groupement Hassi Bir Rekaiz, a joint venture between Algeria’s state oil company Sonatrach, Thailand’s PTTEP and Spain’s CEPSA. Phase 2a centres on a new central processing facility designed to raise the field’s output from roughly 13,000 barrels per day to between 50,000 and 60,000 — a step-change for a single asset.

For an outsider, the structure is the story: a pan-African lender, a Nigerian-controlled contractor and Algerian state crude, with Thai and Spanish partners in the mix. It is the kind of cross-border plumbing that rarely makes headlines but decides where Africa’s energy money actually flows.

Why Afreximbank is doing it

Afreximbank has made a strategic push to finance African firms competing for contracts that once went almost entirely to Western or Gulf players. Backing Arkad lets a Nigerian-owned group take a large slice of Algerian oil infrastructure, keeping engineering fees and supply orders within the continent.

The bank estimates the project will create about 6,000 jobs and stimulate local supply chains. For investors tracking Africa’s energy build-out, the facility is a marker of how development finance is being used to hand African contractors a foothold in the continent’s biggest projects.

What to watch

The near-term test is delivery: EPC contracts of this size live or die on schedule and cost control, and a revolving facility gives the contractor working-capital room but not a guarantee. Beyond HBR, the deal signals appetite for more African-financed, African-executed energy work — the model Afreximbank wants to scale.

Frequently Asked Questions

What did Afreximbank approve?

A US$200 million revolving, dual-tranche facility for Shoreline Power and partners, including the contractor Arkad, to support work on Algeria’s Hassi Bir Rekaiz oilfield.

How much will the oilfield produce?

Phase 2a’s new processing facility is designed to raise output from about 13,000 barrels a day to between 50,000 and 60,000.

Why does the deal matter beyond Algeria?

It channels African development finance to a Nigerian-owned contractor working on North African crude, an example of South–South investment keeping value on the continent.

Sources: African Export-Import Bank (Afreximbank); World Oil; The Africa Report.

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