The Nigerian National Petroleum Corporation Group has announced that it is working with the African Export-Import Bank (AfreximBank) to raise the sum of $5billion to boost its upstream capacity and its energy transition business.
This was disclosed in a statement by Mele Kyari, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC) on Thursday morning. “Afreximbank working with NNPC Ltd to raise $5 billion financing to support our upstream Businesses and facilitate energy supply and transition. Opening gate for many more opportunities of collaboration with Afreximbank,” Kyari tweeted.
The NNPC and Afreximbank team agreed during the meeting to intensify efforts at deepening investment in Nigeria’s oil sector and strengthen the business collaboration between the two institutions.
What you should know about the funding
- The funding would also be used to finance part of the NNPC’s investment including the acquisition of interest in quality upstream oil and gas producing assets.
- Following the commencement of the Petroleum Industry Act, the agreement marks a milestone achievement in the quest for the corporation to scale up investments in the oil and gas industry
- Under the NNPC Ltd funding strategy for selected upstream investments, the Company would be raising between $3.5bn and $5bn as corporate finance to fund major upstream investments.
Repayment of the fund
- This will be done through a Forward Sale Arrangement whereby the funds provided will constitute the payment purchase of 90-120kpd of crude to be delivered to the lender over a period.
- This is projected to be made within a four to eight-year period with an objective to ensure major fiscal obligations and operating expenses are discharged appropriately.
In case you missed it
Earlier this month, Malam Mele Kyari, said that the Petroleum Industry Act (PIA) has provided the organization with the opportunity to shed some of its toxic liabilities. Kyari said the new legislation had raised shareholders’ expectations on the company as well as given NNPC a wide room to make progress.
The NNPC boss also charged staff of the organization to ensure that the company becomes a commercially viable entity and a multi-billion-dollar entity that would continuously deliver value to its shareholders.