As part of a syndicated $3.3 billion crude oil-backed prepayment facility, Afreximbank has released $925 million to Nigeria’s state-owned NNPC, the African trade bank announced on Thursday.
According to the African Export-Import Bank (Afreximbank), this takes the total amount disbursed to Nigeria’s National Petroleum Company (NNPC) to $3.175 billion.
According to Afreximbank, the agreement represented one of the biggest syndicated debt raises in Africa and the largest crude-backed facility in Nigeria.
To support the government’s efforts to stabilize the value of the naira, the pan-African lender has been using oil traders to fund a $3 billion loan to Nigeria’s national oil business after the energy company asked it for the facility last August.
When the NNPC went to Afreximbank for the loan, the naira had surpassed 1,000 to the dollar on the illicit market. The naira was trading at 1,498 to the dollar on Thursday.
Laptops 1000A group of crude oil off-taker lenders, led by Oando Group and Sahara Energy Resource Limited, provided the loans, according to Afreximbank.
To assist Nigeria’s macroeconomic stability and expansion, the trade bank looked to oil traders to finance the loan to NNPC backed by petroleum.
Funding commitments of $2.25 million were obtained by Afreximbank in December for the NNPC loan application.
The naira was devalued twice in less than six months in January to attract dollars after Nigeria’s president Bola Tinubu ended the multiple exchange rate system that kept the currency artificially strong.
Tinubu began implementing reforms in May of last year.
Since then, the nation has been luring international investors with high-yield offers made during open market Treasury bill auctions by its central bank.
