Afreximbank, the Pan-African multilateral financial institution, has successfully orchestrated a groundbreaking syndicated $3.3 billion crude oil prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPCL).Thank you for reading this post, don't forget to subscribe!
This marks Nigeria’s largest-ever crude oil prepayment facility and one of Africa’s most substantial syndicated loans in recent years. The facility, supported by global, international, and regional syndication firms, reinforces market confidence in Nigeria.
The initial disbursement of $2.25 billion, with a second tranche of $1.05 billion expected, constitutes the largest syndicated loan raised by Nigeria in the international market. The five-year facility, featuring a margin of 6.0% per annum above the 3-month secured overnight financing rate (SOFR), aims to bolster Nigeria’s macroeconomic stability, fuel long-term economic growth, and facilitate access to raw materials and trade development.
Key participants in this landmark transaction include Afreximbank, Gunvor International BV, a Geneva-based multinational energy and commodities trading company, and Sahara Energy Resources Limited, a leading African-owned international energy and infrastructure conglomerate.
The deal’s success, despite market challenges, underscores Afreximbank’s expertise in structuring complex oil and gas financing facilities.
Prof. Benedict Oramah, President and Chairman of Afreximbank, emphasized the institution’s commitment to supporting African economies, stating, “The disbursement of the initial $2.25 billion under the facility will support Nigeria’s long-term economic stability, ease access to import financing for raw materials and essential goods, support industrialization, and trade development efforts.”
The participation of global, international, and regional syndication firms signifies solid market confidence in Nigeria, according to Mele Kolo Kyari, NNPCL Group Chief Executive Officer. The involvement of United Bank for Africa (UBA) further underscores its commitment to addressing economic challenges in Nigeria, as noted by Oliver Alawuba, Group Managing Director/CEO of UBA.
This transaction, completed amid year-end pressures, reflects a vote of confidence in Nigeria’s economic prospects and underscores the resilience of the country’s financial markets.