The African Export-Import Bank, Afreximbank, has signed a $1.04 billion dollar facility with the Nigerian National Petroleum Corporation, NNPC, to finance oil exploration.
A statement issued by the bank on Wednesday, said that the agreement was concluded in Durban, South Africa, at the second Intra-Africa Trade fair (IATF2021), which began on Monday.
According to the statement, the transaction comprised a Pre-Export/Shipment Finance Facility underpinned by a Forward Sale Agreement, FSA, and Offtake Contracts from the NNPC, acting as the borrower and seller.
“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 $2.4 billion dollars to the immediate benefit of the government, thereby improving the balance of trade and Gross Domestic Product (GDP) in Nigeria.”
Prof. Benedict Oramah, Afreximbank President, in explaining the bank’s decision in the context of the world’s climate change agenda, said it was a case of adopting a balanced approach.
According to him, Africa was more of a victim than a perpetrator in the emission of destructive greenhouse gases, contributing only a meagre four per cent.
He added that meanwhile a majority of the continent, ironically having been left behind development wise, still had 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,” he added.
The statement said that the deal was signed by Umor Ajia, NNPC Executive Director and Group Chief Executive Officer, on behalf of NNPC.
It added that the transaction complied with Afreximbank’s mandate to promote local content in Africa’s oil and gas and other mining industries and generate foreign receivables into Africa.
The fair, which would end on Sunday, is expected to close about $40 billion dollars’ worth of deals.
Organised by Afreximbank, in collaboration with the AU and the AfCFTA secretariat, the event is being attended by over 1,100 entities exhibiting their goods and services to over 10,000 delegates, visitors and buyers from over 95 countries from the continent and beyond.