Nigeria receives additional $925m from Afreximbank-NNPCL oil deal

• Oil deal’s worth total of $3.3bn

Business a.m.

Nigeria has now received a cumulative disbursement of $3.175 billion from a $3.3 billion crude oil-backed prepayment facility spearheaded by the Nigerian National Petroleum Company (NNPC) Limited. The latest tranche of $925 million arrived recently, adding to the initial funded commitments of $2.25 million secured in December 2023.

The financial arrangement, arranged and coordinated by the African Export-Import Bank (Afreximbank), saw the collective raise of $925 million from a consortium of crude oil off-taker lenders, including the likes of Oando Group and Sahara Energy Resource Limited, among others.

The transaction is expected to strengthen Nigeria’s macroeconomic stability and stimulate enduring economic growth, while simultaneously supporting the nation’s ongoing industrialisation and trade development endeavours.

Benedict Oramah, president of Afreximbank, expressed satisfaction in the milestone achieved with the $3.3 billion facility, highlighting the bank’s capabilities in serving as a key development partner for the African continent.

“It reaffirms our commitment to assisting our 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,” he said.

Oramah acknowledged the historic significance of the facility, describing it as a landmark achievement for being the largest crude oil-backed facility in Nigeria and one of the largest syndicated debts raised in Africa to date.

Highlighting the positive response from the market, Oramah noted that the successful closure of the first accordion was a testament to the strong appetite among investors for well-structured, commodities-backed instruments, further boosting Afreximbank’s commitment to offering innovative financial solutions that support the growth and development of Africa’s economies.

Mele Kyari, group chief executive officer of NNPC Limited, commended Afreximbank for its investment philosophy and approach in fostering economic prosperity.

“The successful disbursement of the first accordion under project Gazelle and its interest in funding viable and strategic projects is a clear indication of investors’ confidence in NNPCL and Nigeria’s growth aspirations,” he said.

Kyari further underscored the importance of the transaction, reaffirming NNPC’s resolve to sustainably harness the country’s natural resources and forge valuable partnerships that will help drive economic progress both within Nigeria and globally.