The Nigerian National Petroleum Company Limited (NNPC Ltd) has secured a $3 billion emergency loan for the repayment of petroleum oil in an effort to stabilize the naira.
NNPC Limited announced in a statement on Wednesday that it had secured crude-for-cash financing from the AFRIEXIM Bank headquarters in Cairo, Egypt.
The oil-for-cash loan is intended to stabilize the foreign exchange market and support the naira as it continues to decline.
“The NNPC Ltd. and AfriEXIM bank have signed a commitment letter and terms sheet for a $3 billion emergency crude oil repayment loan,” the NNPC said.
“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursements that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.”
This is the fourth transaction that NNPCL and AFREXIM Bank have completed in the past three years, and it serves to further strengthen their mutual relationship.
Both Nigeria and NNPCL are shareholders in the AFREXIM Bank, whose sole mission is to promote investment and economic growth in Africa.
Mallam Mele Kyari, Group Chief Executive Officer (GCEO) of NNPC Ltd, executed the loan agreement on behalf of the National Oil Company, while Dr. George Elimbi, Executive Vice President of Afreximbank, signed on behalf of the bank.
The agreement comes approximately 17 months after the NNPCL secured a $5 billion funding commitment from Afreximbank to finance significant upstream sector investments in Nigeria.