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Naira crash: Nigeria secures fresh $925 million loan

Nigeria has secured an additional $925 million loan from the African Export-Import Bank (Afreximbank) to help stabilize the country’s economy.

In a statement on its website on Thursday, Afreximbank announced an additional disbursement of $925m under the syndicated $3.3bn crude oil-backed prepayment facility sponsored by the Nigerian National Petroleum Company Limited.

Its latest accordion disbursement for Project Gazelle Funding Limited brings the total current funded facility size to $3.175bn.

Arranged and coordinated by Afreximbank, the accordion arrangement saw the raising of a combined total of $925m from a consortium of crude oil off-taker lenders including but not limited to the Oando Group and Sahara Energy Resource Limited.

“Afreximbank acted as Mandated Lead Arranger, Technical and Modelling Bank, Bookrunner, Facility Agent, Offshore Account Bank, Intercreditor Agent and Collateral Agent for the transaction which is expected to provide further support for Nigeria’s macroeconomic stability and long-term economic growth while enhancing the country’s industrialisation and trade development efforts,” the bank stated.

This follows the success of the first accordion tranche of the $3.3bn facility.

In December 2023, the project received funded commitments totaling $2.25m.

The $925m accordion arrangement raises the total amount disbursed to $3.175bn.

Commenting on the disbursement, President and Chairman of the Board of Directors of Afreximbank, Prof Benedict Oramah, said, “The milestone achieved thus far on this facility demonstrates the bank’s capabilities in performing its role as a crucial development partner for Africa.

“It reaffirms our commitment to assisting our member states in their efforts to achieve economic growth and stability. This funding will greatly support the attainment of Nigeria’s short and long-term economic development priorities.”

Oramah described the original facility as ‘a landmark’ for being the largest crude oil-backed facility in Nigeria and one of the largest syndicated debts raised in Africa.

He said the closure of the first accordion demonstrated the existence of positive market appetite for well structured commodities-backed instruments.

The Group Chief Executive Officer, NNPC Limited, Mele Kyari, commended Afreximbank management and team for their investment philosophy and active interest in co-creation of prosperity.

“The successful disbursement of the first accordion under project Gazelle and its interest in funding viable and strategic projects is a clear indication of investors’ confidence in NNPC and Nigeria’s growth aspirations,” Kyari stated.

He further assured Afreximbank and all investing communities of NNPC’s resolve to continue to grow the nation’s hydrocarbon resources and strengthen its partnerships across the oil and gas value chain locally, and globally.

On August 17, 2023, the NNPCL announced that it had secured a $3.3bn emergency crude oil repayment loan from the Afreximbank.

It explained that the loan would be used by the oil company to support the Federal Government in stabilising Nigeria’s exchange rate.

The article was originally published on Politics Nigeria.

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