The African Export-Import Bank (Afreximbank) is working with the Nigerian National Petroleum Corporation, NNPC, Limited, to raise $5 billion.
The NNPC Chief Executive Mele Kyari said the financing would support the company’s upstream business and “facilitate energy supply and transition”.
Both parties held talks on January 26 in Cairo and the agreement paves the way for further collaboration
Afreximbank said it would help fundraise for NNPC. The cash would support acquisitions and investments in “energy producing assets in Nigeria as part of NNPC’s growth strategy following its incorporation as a limited liability company”.
NNPC became a limited company as a result of the passing of the Petroleum Industry Act (PIA), signed into law in August 2021.
“This commitment is a step in the right direction for Nigeria,” said African Energy Chamber (AEC) chairman NJ Ayuk.
“This level of commitment not only reaffirms the potential of the country’s upstream sector, but emphasizes the capability of African financial institutions. However, this is only the beginning, and a lot more needs to be done to ensure the continent fully exploits its immense resources.”
NNPC and Afreximbank also held talks on a plan to establish a continental energy bank. A number of institutions have come out in support of such a plan.
These include the African Petroleum Producers’ Organisation (APPO) and the AEC.
Minister of State for Petroleum Resources Timipre Sylva had already held talks on an energy bank with his counterpart in Equatorial Guinea, Gabriel Mbaga Obiang Lima, in September. “We must set up structures to fund our system,” Sylva said.
The move continues Afreximbank’s support for the Nigerian energy industry. It signed a $1.04bn facility in November 2021 to finance exploration.
The bank has also signed up to back a floating LNG , FLNG, facility in Nigeria, backed by UTM Offshore.