NNPC gets $1.04bn facility from Afreximbank for oil exploration

The African Import-Export Bank (Afreximbank) signed a $1.04 billion facility with the Nigerian National Petroleum Corporation (NNPC) to finance oil exploration.

A statement released by the bank on Wednesday said the deal was reached in Durban, South Africa, during the Second Intra-Africa Trade Fair (IATF2021), which began on Monday.

According to the statement, the transaction included a pre-export / shipment financing facility backed by a forward sales contract, FSA and NNPC off-take contracts, acting as borrower and seller.

“The NNPC will enter an FSA in which it will deliver 35,000 barrels of crude oil per day.

“The proceeds from the facility will increase tax and foreign exchange earnings and create thousands of jobs in the oil and gas refining value chain.

“All of this over $ 2.4 billion for the immediate benefit of the government, thereby improving the trade balance and gross domestic product (GDP) in Nigeria.” “

Prof Benedict Oramah, Chairman of Afreximbank, explaining the bank’s decision in the context of the global climate change agenda, said it was about taking a balanced approach.

According to him, Africa was more a victim than a perpetrator in the emission of destructive greenhouse gases, contributing only a meager four percent.

He added that in the meantime, a majority of the continent, ironically left behind in development, still had to depend on fossil fuels for survival and therefore should not bear the brunt of punishment for the mistakes of others.

“Stopping the development of parts of Africa today to create a clean environment for the whole world tomorrow is very reckless,” he added.

The statement said the agreement was signed by Umor Ajia, executive director of the NNPC and chief executive of the group, on behalf of the NNPC.

He added that the transaction was in line with Afreximbank’s mandate to promote local content in Africa’s oil and gas and other mining industries and to generate foreign debt in Africa.

The fair, which ends on Sunday, is expected to close deals worth around $ 40 billion.

Organized by Afreximbank, in collaboration with the AU and the AfCFTA secretariat, the event brings together more than 1,100 entities exhibiting their goods and services to more than 10,000 delegates, visitors and buyers from more than 95 countries of the continent.