The International Finance Corporation (IFC) is investing $60 million into a new United Kingdom based company that is seeking to put the money in oil and gas exploration in the East African region.

The investing arm of the World Bank on Monday disclosed that the money which will be in the form of an equity investment is part of a $600 million equity line to be provided by the investors to Delonex Energy Limited.

Delonex Energy’s principal shareholder is Warburg Pincus, a United States based private equity firm which owns 48 per cent of the oil and gas exploration company.

The company is also owned by Delonex Co-Invest LP which has a 40 per cent stake, IFC which has a 10 per cent stake and management who own 2 per cent of the company.

“IFC plans to provide an equity investment of up to $60 million as part of the $600 million equity line to be provided by the investors to Delonex. The equity would be used to fund set-up costs, the acquisition of oil and gas assets and the early development of such oil and gas assets,” notes disclosure documents from IFC.

The East African region has become a hot spot for oil and gas exploration firms which are raising billions of dollars internationally and sinking the funds in the high risk, high return projects.

Last week British oil and gas exploration firm Tullow said that it had doubled its previous estimates of net oil pay from the Ngamia 1 and Twiga South wells both in Kenya to 200 metres and 75 metres respectively.

It said that drilling on the Etuko prospect which is 14 kilometres east of Twiga South in Block 10BB had confirmed new oil with a net pay of over 40 metres in the Auwerwer and Upper Lokhone targets and that results of drilling on the Lower Lokhone sands are expected by the end of July.

Tullow also said that discussions with Uganda’s government are ongoing to finalise a memorandum of understanding (MoU) aimed at agreeing on a commercialisation plan detailing the integrated development of the upstream, an export pipeline and a refinery sized to meet market demand.

Last month two Australian Securities Exchange-listed exploration firms, FAR Limited and Pancontinental Oil and Gas, disclosed that they are seeking to sell part of their exploration rights on a block off the coast of Kenya, to raise funds that will be used in drilling.

FAR Limited currently owns 60 per cent of block L6, which has three prospects; Tembo, Kifaru and Kifaru West, while the remaining 40 per cent of the joint venture is owned by Pancontinental.

The companies said that they are seeking a farminee for a first well to be sunk possibly in 2014 in the Kifaru prospects.

“Delonex is in the process of building a portfolio of oil and gas assets in the East and Central African region through acquisitions, farm-ins and direct awards from host governments. The project’s location will depend on which assets Delonex decides to acquire,” notes the IFC disclosure documents.

The disclosure documents note that compared to the West and North Africa regions, the East and Central Africa region remains underexplored for hydrocarbons and despite recent major discoveries in Mozambique and Uganda, the region's hydrocarbon potential remains largely untapped.

Delonex is being led by Rahul Dhir, previous chief executive officer of Cairn India, one of the largest independent exploration and production companies in India and other members of the management team include ex-British petroleum and ex-Schlumberger employees as well as former senior managers from Cairn India.