• Friday, April 26, 2024
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Afreximbank signs $1.04bn pact with NNPC to boost crude oil production

Afreximbank board approves US$10m grant for AfCFTA adjustment funds

African Export-Import Bank (Afreximbank) has signed a $1.04 billion facility with the Nigerian National Petroleum Corporation (NNPC) to finance the exploration of petroleum.

The agreement which was concluded during the second intra-Africa trade fair in Durban, comprises a pre-export/shipment finance facility underpinned by a forward sale agreement (FSA) and offtake contracts from the Corporation acting as the borrower and seller.

According to Umor Ajia, Executive Director and Group Chief Executive Officer on behalf of NNPC, the transaction is in alignment with Afreximank’s mandate to promote local content in Africa’s Oil and Gas and other mining industry and generate foreign receivables into Africa.

“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,” he said.

Read also: NNPC records N1.29 trn revenue deficit in 9 months

On his part, the President of Afreximbank, 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.

According to him, Africa is more of a victim than a perpetrator in the emission of destructive greenhouse gases, contributing only a meager 4 percent.

“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,” Oramah said.