AfreximBank, NNPC Ltd to raise $5bn to boost upstream capacity, energy transition businesses

By Uthman Salami

The Nigerian National Petroleum Corporation (NNPC) limited is working, hand-in-glove, with the African Export-Import Bank (AfreximBank) to raise the sum of $5billion to enhance boost in its upstream capacity and its energy transition business.

The Group Managing Director, Nigerian National Petroleum Corporation, Mallam Mele Kilo Kyari made this announcements on his verified Twitter handle yesterday.

According to the NNPC’s boss tweet, “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.”

Both agreed during the meeting to expedite efforts at deepening investment in Nigeria’s oil sector and strengthen the business collaboration between the two institutions.

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.

This announcement of the agreement signified 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.

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.

The NNPC boss had 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.