First Modular Gas Systems, a clean energy company founded by private equity firm Àrgentil Capital alongside Dharmattan Gas Facilities, has raised an undisclosed amount of capital from Africa Infra Plus Fund.
The funding will allow First Modular to achieve financial closure to drawdown on equity and debt financing for its first gas processing plant in Nigeria’s Anambra state, Argentil said Friday.
The total project cost for this first plant is estimated to be $16 million.
Africa Infra Plus Fund is a special situation infrastructure equity fund with a corpus of 40.5 billion Nigerian naira (about $98 million). It has headroom to raise up to NGN200 billion under its current fundraise programme.
This is the firm’s first naira-based infrastructure fund and can invest debt or equity in projects in the country. The fund’s target sectors include power, telecommunication, transportation and basic infrastructure in Nigeria, with opportunistic oversight of other West African countries.
The fund’s investors comprise pension funds, asset managers, sovereign funds and insurance companies. It is managed by Africa Plus Partners Nigeria, an infrastructure-focused private equity firm.
Àrgentil co-created First Modular to make it a leading midstream energy company that develops and operates distributed gas processing facilities in multiple locations with an installed capacity of 50 million metric standard cubic feet a day (mmscf/d). It will deploy two plants in southeastern Nigeria in the first phase to process up to 15mmscf/d of gas that would otherwise be flared.
The investment will increase supply of domestic LPG into the market. Currently, Nigeria imports about 70% of the LPG it consumes domestically.
First Modular said it will shortly execute definitive documents with a leading provider of credit enhancement. This will help it attract local currency financing from the Nigerian capital market via guaranteed debt instruments. This use of blended finance is likely to be a key part of its funding strategy as it expands.
Argentil is a principal investing and private equity firm that invests in sectors like energy, agribusiness, consumer and technology. It invests in SMEs via the Àrgentil Principal Investment Portfolio II and also makes direct investments from its balance sheet to back entrepreneurs.
Its recent investments include Sygen Pharmaceuticals, Plentywaka and 54gene. Àrgentil is also expanding its investment focus via the $95 million Àrgentil SME Investment Fund to cover key West Africa countries.