NNPC gets $5bn funding from AfreximBank to finance upstream investments
The Nigerian National Petroleum Company (NNPC) has secured a funding of $5bn from the African Export Import Bank (Afriexim Bank) in corporate finance to support major investments in Nigeria’s upstream oil industry.
According to the NNPC which announced this in a statement on its website following a meeting with AfreximBank in Cairo, Egypt, the money would also be used to finance part of the NNPC’s acquisition of interest in quality upstream oil and gas producing assets.
It explained that the agreement was a major achievement of the Petroleum Industry Act (PIA) that was signed by President Muhammadu Buhari in August 2021.
An agreement to also intensify efforts at deepening investment in Nigeria’s oil sector and business collaboration was reached during the meeting attended by NNPC Managing Director, Malam Mele Kyari, and President of the African Export-Import Bank (Afreximbank) Prof Benedict Oramah.
NNPC further explained that 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 90-120kpd of crude within a four to eight year period.
It added that as part of the landmark transaction, Afreximbank would also underwrite $1bn as part of forward sales base trade finance transaction, while the two institutions would also explore the idea of establishing a pan-African Energy Transition Bank.
