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The African Finance Corporation (AFC) announced on Tuesday that it has approved a $28 million subordinated loan facility for the development of the Halk El Menzel offshore oil concession block (the Helm Project) in Northern Tunisia.

The Lagos-based multilateral lender said the subordinated loan has a 30-month tenor and will ensure that the project reaches first oil production by January 2018.

“AFC has a long-standing commitment to building and developing African economies that require investment in key economic sectors,” said Andrew Alli, President of the AFC. “AFC is delighted to be investing in Tunisia's natural resources sector and supporting the creation of high skilled jobs.”

The Helm Project being developed by Topic SA – a leading Tunisian oil and gas exploration company, which was established in 2000 by the Tunisian energy conglomerate, the Toumi Group. The company has shareholder base, including the International Finance Corporation, Sarost Group, Banque de L'Habitat Group, Société Tunisienne de Banque, and the Toumi Group.

The oil project is a low cost development project covering an offshore area of 570 square km in the gulf of Hammamet in northern Tunisia, a significant petroleum province. The total estimated project cost is $157.5 million.

AFC said the funding required to achieve first oil will be used for transport, installation, start up and commissioning, first well drilling, including acquisition of critical production installations, floating storage and offloading units, repair, upgrade of the existing buoy, supply of topside facilities, and completion of a wellhead platform.

“Tunisia has made significant progress by embarking on reforms that will drive private-sector growth and encourage investment,” Alli said. “AFC looks forward to continuing to support the country as it enters the next growth chapter.”