Afreximbank, Africa's multilateral trade finance institution headquartered in Egypt, has successfully arranged a syndicated $3.3 billion crude oil prepayment facility sponsored by the Nigerian National Petroleum Co Ltd (NNPCL). The initial disbursement of $2.25 billion, with an expected second tranche of $1.05 billion, marks Nigeria's largest crude oil prepayment facility and one of Africa's largest syndicated loans in 2023. Participating lenders include Afreximbank, Gunvor International BV based in Geneva, and Sahara Energy Resources Limited, an African-owned energy and infrastructure conglomerate.
Afreximbank, as the Sole Mandated Lead Arranger, Technical and Modelling Bank, Bookrunner, Facility Agent, Offshore Account Bank, Intercreditor Agent, and Collateral Agent, played a crucial role in structuring the complex oil & gas financing facility. United Bank for Africa Plc (UBA) acted as the Local Arranger and Onshore Account Bank. The 5-year facility, amidst challenging market conditions, carries a margin of 6.0 percent per annum above the 3-month secured overnight financing rate. The innovative transaction structure incorporates a price balance mechanism, releasing 90 percent of excess cash from committed barrel sales for Nigeria's use. This facility underscores Afreximbank's commitment to supporting African economies, providing essential economic stability, and aiding access to import financing for raw materials and goods.