PIA: NNPC secures $5bn funding from AfreximBank

The African Export Import Bank (Afriexim Bank) has committed $5 billion in corporate finance to the Nigerian National Petroleum Company Ltd to support major investments in Nigeria’s upstream oil industry.

The funding would also be used to finance part of the NNPC’s acquisition of interest in quality upstream oil and gas producing assets.

NNPC announced this following a meeting with AfreximBank on Wednesday in Cairo, Egypt.

The agreement is seen as a major achievement of the Petroleum Industry Act (PIA) signed by President Muhammadu Buhari in August 2021.

During the meeting attended by NNPC Managing Director, Malam Mele Kyari, and President of the African Export-Import Bank (Afreximbank) Prof Benedict Oramah an agreement was reached to also intensify efforts at deepening investment in Nigeria’s oil sector and business collaboration.

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.

As part of the landmark transaction, Afreximbank will also underwrite $1bn as part of forward sales base trade finance transaction.

The two institutions will also explore the idea of establishing a pan-African Energy Transition Bank.