Nigeria’s NNPC receives Afreximbank $925M crude oil-backed loan

The African Export-Import Bank (Afreximbank) has allocated $925 million to Nigeria’s state-owned NNPC as part of a syndicated $3.3 billion prepayment facility backed by crude oil, according to the bank announcement on Thursday.  This disbursement brings the total amount disbursed to the Nigerian National Petroleum Company (NNPC) to $3.175 billion, the report shows.

Afreximbank’s Benedict Oramah described the deal as the largest crude-backed facility in Nigeria and one of the continent’s largest syndicated debts.

The pan-African lender had engaged oil traders to finance a $3 billion loan to Nigeria’s state oil company following its request for the facility in August last year. This initiative aimed to support the government’s efforts to stabilize the naira currency.

At the time of NNPC’s request to Afreximbank for the loan, the naira had depreciated to 1,000 against the dollar on the black market. As of Thursday, the naira was quoted as low as 1,498 per dollar.

Funding for the loan to NNPC was raised from a consortium of crude oil off-taker lenders, including Oando Group and Sahara Energy Resource Limited, Afreximbank stated. The trade bank had enlisted oil traders to finance the crude-backed loan to NNPC, to support Nigeria’s macroeconomic stability and growth.

According to Reuters, in December, Afreximbank secured funding commitments totaling $2.25 million for NNPC’s loan request. Nigeria’s president, Bola Tinubu, initiated reforms last May, including two devaluations of the naira within six months in January, aiming to attract dollars after discontinuing a multiple exchange rate system that had artificially strengthened the currency.

Meanwhile, Teva became the first company to introduce an electric truck into production in Britain. Since then, the country has been actively seeking foreign investors, offering high yields through its central bank at open market Treasury bill auctions.

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