NNPC secures $3b emergency crude-for-cash loan to stabilise naira

The Nigerian National Petroleum Company Limited (NNPC Ltd) has secured an emergency $3billion crude oil repayment loan which is aimed at stabilising the naira.

NNPC Limited in a statement on Wednesday said it secured the crude-for-cash funding from African Export-Import (AFRIEXIM) Bank headquarters in Cairo, Egypt.

The oil-for-cash loan is meant to be used to support the naira as it continues it’s free fall and also stabilise the foreign exchange market.

“The NNPC Ltd. and AfriEXIM bank have jointly signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan,” NNPC said.

“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.”

This is the fourth transaction being consummated between NNPCL and AFREXIM Bank over the last 3 years and goes to further consolidate the mutual relationship between the two entities.

Both Nigeria and NNPCL are shareholders in AFREXIM Bank, with sole purpose of enhancing investments and growing prosperity in Africa.

The agreement for the loan saw the Group Chief Executive Officer (GCEO) of NNPC Ltd, Mallam Mele Kyari sign for the National Oil Company while Dr George Elimbi, Executive Vice President Afreximbank signed for the bank.

The deal is coming about 17 months after the NNPCL secured a $5bn funding commitment from Afreximbank to finance major investments in Nigeria’s upstream sector.