The African Export Import Bank (AFREXIM Bank) has committed $5 billion in corporate finance to the Nigerian National Petroleum Company Ltd to fund major investments in the country’s upstream sector.
This fund raise is in response to President Muhammadu Buhari’s signing of the Petroleum Industry Act in August 2021, under which the NNPC was re-incorporated as a commercially oriented limited liability company. The $5 billion they raised will now allow them to acquire and operate producing oil and gas assets in Nigeria.
The funding commitment was the result of a meeting between the NNPC Ltd team led by Group Managing Director/Chief Executive Officer Mele Kyari and the Chairman of the Board of Directors and President of the African Export-Import Bank (Afreximbank), Benedict Oramah, in Cairo, Egypt on Wednesday, according to several local and international sources sighted by NIPC Intelligence.
According to the reports, NNPC and Afreximbank agreed to deepen their business collaboration, among other things.
“The bank agreed to play a finance advisory and fundraising role in order to raise $5 billion for the “acquisition, investment, and operation of energy” producing assets in Nigeria as part of NNPC’s growth strategy following its incorporation as a limited liability company.”
“Afreximbank will also underwrite $1 billion as part of the landmark transaction as part of the forward sales base trade finance transaction.”
“The NNPC and Afreximbank also explored the innovative idea of establishing a pan-African Energy Transition Bank and agreed to collaborate toward achieving the goal,” according to the reports.