Mr. Umor Ajia, NNPC Executive Director and Group Chief Executive Officer (left) and Mr. Amr Kamel, Executive Vice President, Business Development & Corporate Banking, Afreximbank (Right)
Durban, 17 November 2021 – African Export-Import Bank (Afreximbank) has signed a $US1.04 billion facility with the Nigerian National Petroleum Corporation (NNPC) to finance the exploration of petroleum. The agreement was concluded yesterday in Durban during the second intra-Africa trade fair, which opened on 15 November and runs until 21 November.
The transaction comprises a Pre-Export/Shipment Finance Facility underpinned by a Forward Sale Agreement (FSA) and Offtake Contracts from the Nigerian National Petroleum Corporation acting as the Borrower and Seller.
NNPC will enter an FSA within which it shall deliver 35,000 barrels of crude oil per day. The proceeds of the facility will boost tax revenues and foreign currency receipts and create thousands of jobs in the oil and gas refining value chain, all by more than US$2.4bn to the immediate benefit of the government thereby improving the balance of trade and Gross Domestic Product in Nigeria – Africa’s largest economy.
Signed by Mr. Umor Ajia, NNPC Executive Director and Group Chief Executive Officer on behalf of NNPC, the transaction complies with Afreximank’s mandate to promote local content in Africa’s Oil and Gas and other mining industry and generate foreign receivables into Africa.
While lauding the deal as very innovative, Afreximbank President and Chairman of the Board of Directors Prof. Benedict Oramah explained the Bank’s decision in the context of the world’s climate change agenda, saying this is a case of adopting a balanced approach.
Prof. Oramah added that Africa is more of a victim than a perpetrator in the emission of destructive greenhouse gases, contributing only a meagre 4%, while a majority of the Continent, ironically having been left behind development wise, still has to depend on fossil fuel for survival, and should thus not bear the brunt of the punishment for the mistakes of others.
“Stopping development for parts of Africa today to achieve a clean environment for the whole world tomorrow is utterly foolhardy,” quipped Prof. Oramah.
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About Afreximbank: African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. The Bank has a rich history of intervening in support of African countries in times of crisis. Through the Pandemic Trade Impact Mitigation Facility (PATIMFA) launched in April 2020, Afreximbank has disbursed more than US$6.5 billion in 2020 to help member countries manage the adverse impact of financial, economic, and health shocks caused by the COVID-19 pandemic. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has completed the development of a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Afreximbank is working with the AU and the AfCFTA Secretariat to develop an Adjustment Facility to support countries in managing the impact of tariff revenue losses arising from the implementation of the Continental Free Trade Area. At the end of 2020, the Bank’s total assets and guarantees stood at US$21.5 billion, and its shareholder funds amounted to US$3.4 billion. Afreximbank disbursed more than US$42 billion between 2016 and 2020. The Bank has ratings assigned by GCR (international scale) (A-), Moody’s (Baa1) and Fitch (BBB-). The Bank is headquartered in Cairo, Egypt.
For more information, visit: www.afreximbank.com
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Media Contact: Amadou Labba Sall; asall@afreximbank.com