Success Nwogu 
The $3 billion loan promised to the Nigerian National Petroleum Corporation Limited (NNPCL) by the African Export-Import Bank (Afreximbank) to stabilise the naira has received a boost as the bank searches for oil marketers willing to finance the deal. The bank yesterday explained that it approached the marketers in recent weeks seeking their interest in funding the oil-backed loan and that it was working to craft terms to offer to the trading houses.
An oil executive, who declined to be named because he was not authorised to speak publicly on the issue, told Reuters that many oil traders were interested in the deal but needed to see the terms. According to him, oil prices rising above $90 per barrel would help increase the interest.
He said: “There is a lot of interest, but they need to see terms.” Both NNPCL and Afreximbank did not comment as of the time of writing the story. NNPCL had on earlier announced that it had secured a $3 billion crude oil repayment loan from the African Export- Import Bank (Afreximbank).
The facility is expected to be used to boost the naira against the dollar. It disclosed the agreement for the facility via its official handle Twitter. It was titled: Relief For The Naira: NNPC Ltd Secures $3billion Emergency Crude Repayment Loan from AFREXIM Bank The NNPC Ltd.
The signing ceremony took place at Afreximbank’s headquarters in Cairo, Egypt with NNPCL saying that the facility would provide some immediate disbursement that will enable it to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market.
While the Group Chief Executive Officer (GCEO), NNPCL, Mallam Mele Kolo Kyari, signed for the oil company, Vice President, Afreximbank, Dr George Elembi, signed for the bank. The ceremony took place at Afrexim- bank’s headquarters in Cairo, Egypt. The NNPCL’s tweet read: “The Nigerian National Petroleum Company (NNPC) Limited and the African Export- Import Bank (Afreximbank) have jointly signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan.”
The need to stabilise the naira became urgently imperative following the depreciation of the currency and the high fuel pump price. Some analysts nevertheless see an upside. “It’s an upfront cash loan backed by proceeds from a limited volume of future crude oil production. The loan will assist NNPC Ltd. to pay its taxes and royalties in advance whilst equipping the federal government with the necessary dollar liquidity to stabilize the Naira, without much risk,” said Ayodele Oni, energy lawyer and partner at Bloomfield law firm.
Prior to the current development, report emerged that sources familiar with the $3 billion loan deal said it was now on ice after investors who were supposed to make up the balance of the syndicated loan got cold feet, leaving only the African Export-Import (Afrexim) bank, which can not single- handedly provide all the cash.
