The Nigerian National Petroleum Company (NNPC) Ltd has secured a $5bn corporate finance commitment from the African Export Import Bank (AFREXIM).
The $5bn fund secured by NNPC is to help fund major investments in thr Nigeria’s upstream sector.
The funding commitment was secured following a meeting between the NNPC Ltd team led by the Group Managing Director/Chief Executive Officer, Malam Mele Kyari and the Chairman of the Board of Directors and President of the African Export-Import Bank( Afreximbank), Prof Benedict Oramah.
Kyari, alongside several stakeholders in the NNPC met with Oramah in Cairo, Egypt on Wednesday.
Shortly after the meeting, Kyari announced that the NNPC has secured a total of $5bn commitment fund.
The development is a major milestone achievement in the quest for the corporation to scale up investments in the oil and gas industry following the commencement of the implementation of the Petroleum Industry Act.
The PIA was signed into law by President Muhammadu Buhari on 16th August, 2021.
The funding would also be used to finance part of the NNPC’s investment including acquisition of interest in quality upstream oil and gas producing assets.
The acquisition is an integral part of the NNPC’s corporate strategy to rebalance its portfolio by divesting from some toxic assets to acquire choice strategic assets that will help support its long term strategic objectives.
The repayment of the funding is expected to be done through a Forward Sale Arrangement whereby the funds provided will constitute the payment purchase of 30-60kpd of crude to be delivered to the lender over a period.
The repayment of the fund is being projected to be made within a four to eight year period with an objective to ensure major fiscal obligations and operating expenses are discharged appropriately.
Also, at the meeting, the NNPC and Afreximbank team agreed to intensify efforts at deepening investment in Nigeria’s oil sector as well as the business collaboration between both institutions.
