Juliet Jacob Ochenje
In a move to bolster its oil production and meet up with growing global demand, the Nigerian National Petroleum Company Limited (NNPCL) has secured a $3 billion dollars crude oil loan from the African Export-Import Bank (AFREXIM).
This latest deal comes as a huge relief for NNPCL which has been grappling with cash flow challenges due to the impact of the COVID-19 pandemic on the global oil market.
The loan according to the organisation is, however, not crude for refined product swap as earlier reported, but rather an emergency cash loan against proceeds from a limited amount of future crude oil production.
In a publication made public on the NNPCL’s website titled: “What you need to know about NNPC Ltd $3 billion Emergency crude repayment loan from AFREXIM Bank” stated that the loan covers just a fraction of the company’s entitlements, added that there are no sovereign guarantees tied to the loan.
“The loan will assist NNPC Ltd in settling taxes and royalties in advance. It will also equip the Federal Government with the necessary dollar liquidity to stabilize the naira, with limited risk,” it added.
