Seven Energy was founded by a group of Nigerian investors and international executives in 2004. It benefits from a strong management team experienced in upstream, midstream, as well as gas to power generation, under the leadership of CEO Phillip Ihenacho. The Company’s main shareholders are in the table below.

Table 2: Seven Energy’s main shareholders

IFC investment will consist of up to US$75 million equity investment. The terms of this investment are still being finalized.

Estimated Project Cost

in US$ million	Amount	Percentage (%)
General Capex	400	58.33%
Midstream Acquisitions	200	41.67%
Total Estimated Project Cost	600	100.00%

Project Financial Plan

in US$ million	Amount	Percentage (%)
IFC Equity	75	16.67%
Other Equity	150	25.00%
Total Equity	225	41.67%
Debt	375	58.33%
Total Debt	375	58.33%
Total Proposed Financial Plan	600	100.00%

75.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	0.0
Equity	75.0

* These investment figures are indicative

The Project will be located in the South Eastern region in the Akwa Ibom and Cross River states of Nigeria.

Greater availability of gas is one of the key ingredients for increasing power generation in Nigeria, a country that suffers significantly from lack of electricity and where only about 50% of the population has access to electricity from the grid. The quality of service is generally poor and lack of electricity has put a constraint on the country''s economic growth. There is about 6 GW of existing capacity in Nigeria, of which only about 4.5 GW is operating. The Federal Government of Nigeria''s ambitious sector reforms have recently met some major milestones, amongst which the privatization of 6 Generation Assets (GENCOs) and 10 Distribution Assets (DISCOs), the Transmission Company of Nigeria''s management that has been given to Manitoba Hydro International and the Gas Aggregator that has been created and is operating. Overall, it is estimated that generation capacity will increase to 15 GW in 2020 (mainly thermal). If supplied, gas consumption by the power sector could reach 1.9 Bcf/d in 2015 and 2.6 Bcf/d by 2020. Gas production and transportation is critical to the energy mix, and Nigeria harbors significant gas reserves. Seven Energy''s midstream capacity will be sufficient to supply gas for up to 2,15 GW of power capacity, which represents more than a third of the country''s current capacity. In addition to supplying gas to the Ibom Power Plant (IPP), the Company will directly supply the Calabar National Integrated Power Project (NIPP), a plant with a capacity of about 560 MW. Moreover, IFC funding would also contribute to a planned 2014 project between Seven and an IOC to eliminate approximately 23mmcfd of IOC flared gas. The project will divert the gas to Sevens Uquo gas facility where it will be stripped of liquids and the residual gas blended with Sevens gas, adding to Seven''s gas and liquids steams, in addition to eliminating the flared gas. Finally, the project will generate direct jobs and indirect jobs (through power provided to the grid and to industries including a fertilizer plant in the Akwa Ibom state), as well as government revenues.

Although governance has been weak in the country as captured by various governance metrics (i.e. World Bank Governance Indicators and Transparency International), it has been improving in the last years. Nigeria has implemented reforms along the extractives value chain over the past ten years, including improved revenue management and saving (establishment of the Excess Crude Account). Nigeria was among the first countries to adopt and implement the Extractive Industries Transparency Initiative (EITI) to improve governance and in the oil sector. The NEITI Act was passed into law in 2007, and the country became EITI compliant in 2011. Furthermore, the 2010 Roadmap for Power Sector Reform clearly outlines comprehensive power sector reform to expand supply and open the door to private investment, which is ultimately expected to improve governance in the energy value chain.

IFC additionalities to this project include a) helping to complete the Company''s much needed fund raising both for its upstream and midstream related capital expenditures and also for enhancing the profile / credibility of its shareholder base in view of its proposed 2014/15 IPO, b) ensuring that the Company adheres to high environmental and social standards, which is critical for this industry in the region, and c) providing investor comfort that the World Bank Group is involved at a variety of levels, and would be able to provide support both with subsequent debt with a longer term tenure than what is currently available in the Nigerian market and indirectly through a PRG.

The Project has been assessed as an IFC Category B investment as it will result in a limited number of specific impacts that can be avoided or mitigated by adhering to industry recognized standards, guidelines and design criteria. Key findings of the appraisal that determined categorization included:



- The scope of the Project covers a limited “brownfield” footprint of the recently completed onshore Stubb Creek and Ekid receiving facilities along with supporting infrastructure.

- Seven Energy operations present potential impacts and risks that are typical for limited-scale oil and gas activities. These impacts and risks can be readily identified and avoided or reduced by following good international industry practice.

- Seven Energy is strongly committed to effective QHSSEC management and as part of IFC’s investment the Company is undergoing a review of its own existing comprehensive management systems. The review will augment these existing systems to ensure consistency with IFC’s Performance Standards and will be organized to meet ISO14000 and OHSAS 18001.

- There are no offshore activities as part of this investment.

- Future field-development, exploration and/ or acquisition activities will be assessed on a case by case basis before the activities begin via an appropriate level of environmental and social assessment aligned with both national regulatory standards and consistent with IFC’s Performance Standards and applicable EHS guidelines.



No significant environmental or social sensitivities have been found at Seven Energy’s operated locations. The Company’s existing procedures include processes for the identification of QHSSEC impacts and risks prior to entering new development areas and producing assets (including environmental audits, baseline studies and environmental and social impact assessments). Proposed activities can therefore be assessed on a case by case basis before activities begin and management measures commensurate with the identified impacts and risks can then be developed and implemented where necessary.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.