The Nigerian National Petroleum Corporation (NNPCL) has achieved a milestone by securing a US$3.3 billion crude oil advance facility, making it the largest syndicated loan ever raised by Nigeria in the international market.
This financial milestone, supported by the African Export-Import Bank (Afreximbank) and other participating financial institutions, aims to strengthen Nigeria’s macroeconomic stability and stimulate long-term economic growth. The syndicated loan is one of the largest transactions in Africa in recent years, with an initial payment of $2.25 billion. United Bank for Africa Plc (UBA) acted as the local arranger and onshore account bank for the transaction. The arrangement is aimed at reducing foreign exchange illiquidity and stabilizing the Nigerian foreign exchange market.
The structure of the deal provides that 90% of the surplus cash from the sale of the promised barrels will be released to the borrower after debt repayments, with the remaining 10% used to prepay the facility. Afreximbank leveraged its extensive experience in building complex oil and gas financing facilities across Africa and played a key role in the successful closure of the facility.
Benedict Orama, President of Afreximbank, highlighted the bank’s commitment to supporting African economies. NNPCL Group CEO Mele Kolo Kyari highlighted the impact of the agreement on Nigeria’s macroeconomic stability. Oliver Arauba, Managing Director and CEO of UBA Group, expressed the bank’s commitment to addressing Africa’s economic challenges and highlighted UBA’s history of engaging in critical resource-based transactions.
