June 10, 2024 [Reuters]- Afreximbank has disbursed $925 million to Nigeria’s state-owned NNPC, part of a syndicated $3.3 billion crude oil-backed prepayment facility, the African trade bank said on Thursday.

This brings the total disbursement to Nigerian National Petroleum Company (NNPC) to $3.175 billion, African Export-Import Bank (Afreximbank) said.

Afreximbank said the deal was the largest crude-backed facility in Nigeria and one of the largest syndicated debts raised in Africa.

The pan-African lender had been tapping oil traders to finance a $3 billion loan to Nigeria’s state oil company after the energy firm approached it for the facility last August, to help the government’s efforts in stabilising its naira currency.

The naira had hit 1,000 to the dollar on the black market at the time the NNPC approached Afreximbank for the loan. On Thursday the naira was quoted as low as 1,498 per dollar.

Afreximbank said the funds was raised from a consortium of crude oil off-taker lenders including Oando Group and Sahara Energy Resource Limited.

The trade bank had sought oil traders to fund the crude-backed loan to NNPC, with aim to support Nigeria’s macroeconomic stability and growth.

In December, Afreximbank received funding commitments totaling $2.25 million for the NNPC loan request.

Nigeria’s president Bola Tinubu launched reforms last year May including devaluing the naira twice in less than six months in January to attract dollars after ending a multiple exchange rate system that keep the currency artificially strong.

The country has since been courting foreign investors for inflows with high yield offer by its central bank at its open market Treasury bill auctions.

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