Loan-for-crude: Oando reveals $550m contribution to Afrexim Bank facility

Indigenous oil company, Oando Plc, has announced that it contributed $550m to the $925m disbursed to the Federal Government by the African Export-Import Bank under the $3.3bn crude oil-backed finance facility sponsored by the Nigerian National Petroleum Company Limited.

In a corporate notice filed with the Nigerian Exchange Limited on Friday, the oil company said that the contribution was made via its subsidiary, Oando Trading.

NNPC’s $3.3bn oil-for-cash loan was first announced in August 2023; a transaction aimed at supporting the naira and stabilising the foreign exchange market.

Oando in the statement signed by its Chief Compliance Officer/Company Secretary,  Ms Ayotola Jagun, said that it was party to the $925m accordion arranged and coordinated by African Export-Import Bank for Project Gazelle; the name for the transaction.

The firm noted that aside from its $550m, the balance of $375m was raised by other parties.

Group Chief Executive, Oando Plc, Wale Tinubu, explained, “The successful completion of this facility signifies another win for the company and the country at large. The transaction further reinforces Oando’s ability to create value and the company’s status as the indigenous partner of choice in Nigeria. As a proudly indigenous company, our ambition has always been to use our platform to support the sustainable development of the nation.

“Against this backdrop, Project Gazelle will be instrumental in realizing the Federal Government’s efforts to boost the country’s socioeconomic indices. Afreximbank as lead arranger continues to support African corporations – public and private growing confidence in the market and continent.”

In a statement on Thursday, the continental bank which acted as the Mandated Lead Arranger, Technical and Modelling Bank, Bookrunner, Facility Agent, Offshore Account Bank, Intercreditor Agent and Collateral Agent for the transaction said it is expected to provide further support for Nigeria’s macroeconomic stability and long-term economic growth while enhancing the country’s industrialisation and trade development efforts.”

The announcement follows the success of the first accordion tranche of the $3.3bn facility. In December 2023, the project received funded commitments totalling $2.25m.

The $925m accordion arrangement raises the total amount disbursed to $3.175bn.

Commenting on the disbursement, the President and Chairman of the Board of Directors of Afreximbank, Prof. Benedict Oramah, said, “The milestone achieved thus far on this facility demonstrates the bank’s capabilities in performing its role as a crucial development partner for Africa.

“It reaffirms our commitment to assisting our member states in their efforts to achieve economic growth and stability. This funding will greatly support the attainment of Nigeria’s short and long-term economic development priorities.”