Afreximbank Confirms Release Of $3.175bn Syndicated Credit To Nigeria

The African Export-Import Bank (Afreximbank) has released $925 million to Nigeria under the $3.3 billion syndicated credit facility sponsored by the Nigerian National Petroleum Company Ltd (NNPCL), bringing total disbursements to $3.175 billion.

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

This disbursement, it said, “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.”

According to NNPCL’s chief executive officer, Mele Kyari commented that, “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 NNPCL and Nigeria’s growth aspirations.”

The financing campaign, called Project Gazelle, is Nigeria’s biggest crude oil prepayment facility and one of the largest syndicated loans raised in Africa last year, according to Afreximbank.

Afreximbank had earlier disbursed $2.25 billion under Project Gazelle. “The disbursement of the initial US$ 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 Industrialisation and trade development efforts”, Afreximbank president, Benedict Oramah, said in a statement on January 12, 2024.

“Investors were keen to consider ticket sizes of US$250 million and US$500 million amidst current headwinds and year-end pressures in the loan markets”, Afreximbank said at the time. The 5-year facility carries a margin of 6.0 per cent per annum above the 3-month secured overnight financing rate,” Oramah stressed.

The transaction structure, Oramah noted, has an embedded price balance mechanism where 90 per cent of all excess cash from the sale of the committed barrels (after debt service) will be released while the balance of 10 per cent will be used to prepay the facility, effectively shortening the final maturity of the facility and freeing cash flow from future pledged cargoes for use by Nigeria.
Last January, the Central Bank of Nigeria (CBN) said it had paid $2 billion in foreign exchange liabilities across various sectors including petroleum, aviation and manufacturing.