Renergen in line for $500mn from DFC for S African gas project
Renergen has signed a preliminary agreement for a loan of up to $500mn from the US International Development Finance Corp. (DFC) for the second phase of its Virginia natural gas and helium project in South Africa, it said on June 6.
DFC, which provided $40mn for the project's first phase in 2019, has finished a preliminary screening for the second phase, and has now signed a retainer letter with Renergen on additional funding. The two sides will analyse the project further, potentially undertaking on-site diligence once the first-phase plant is complete.
Renergen also said it had received multiple letters of intent on co-lending alongside DFC for the second phase with a cumulative value of more than $700mn, which exceeds the remaining debt requirement.
"We find ourselves in a very strong position as we embark on turning on the Virginia gas project plant in the coming weeks," Renergen CEO Stefano Marani said in a statement. "The company has grown significantly in size and scale and importantly, now has the ability to sculpt terms to suit our financing requirement."
Renergen is targeting up to 65% debt funding for the project, it said, adding that there is "significant head room to meet financial covenants."
The Virginia project comprises various gas fields across Welkom, Virginia and Theunissen in South Africa's Free State. Their natural gas is very pure, according to Renergen, with an average methane content of more than 90%, but they also contain some of the richest helium concentrations recorded globally, the company has said.
US helium production is on the decline, and Russia and Qatar are anticipated to dominate the global market for the resource, with projects such as a 20mn m3/year helium hub that Gazprom is developing in east Siberia.