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Afreximbank has disbursed USD 925 million to Nigeria’s state-owned NNPC as part of a syndicated USD 3.3 billion crude oil-backed prepayment facility. This is the largest crude-backed facility in Nigeria and one of the largest syndicated debts raised in Africa
The loan is aimed at stabilizing the naira and supporting Nigeria’s macroeconomic stability and growth.This brings the total disbursement to the Nigerian National Petroleum Company (NNPC) to USD 3.175 billion, according to the bank. The pan-African lender has been engaging oil traders to finance a USD 3 billion loan to Nigeria’s state oil company. This move came after the energy firm approached Afreximbank for the facility last August to support the government’s efforts in stabilizing the naira.
Nigeria’s president, Bola Tinubu, launched reforms last May, including devaluing the naira. However, the currency has struggled to stabilise and remains as volatile as ever. At the time the NNPC approached Afreximbank for the loan, the naira had hit 1,000 to the dollar on the black market. As of Thursday, the naira was quoted as low as 1,498 per dollar.
Afreximbank said the funds were raised from a consortium of crude oil off-taker lenders, including Oando Group and Sahara Energy Resource Limited. The trade bank had sought oil traders to fund the crude-backed loan to NNPC, aiming to support Nigeria’s macroeconomic stability and growth.
The milestone achieved thus far, on this facility, demonstrates the Bank’s capabilities in performing its role as a crucial development partner for Africa, stated Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank. It reaffirms commitment to assisting bank’s member states in their efforts to achieve economic growth and stability. This funding will greatly support the attainment of Nigeria’s short and long-term economic development priorities.
Read Also:
https://trendsnafrica.com/nigeria-secures-lion-chunk-of-afreximbanks-oil-and-gas-funding/
https://trendsnafrica.com/nigeria-gets-us3-billion-crude-oil-repayment-loan-from-afreximbank/
Nigeria has committed to delivering a total of 164.25 million barrels of crude oil, at a rate of 90,000 barrels per day, from 2024 onwards to settle the loan through Project Gazelle Funding Ltd, an “orphan” special purpose vehicle (SPV). Essentially, the NNPC has used 38.58 per cent of five years’ worth of tax and royalty oil as collateral to secure the loan. Nigeria possesses over 35 billion barrels of untapped proven reserves, presenting an opportunity to generate necessary funding through methods such as forward sale financing.
