Commenting on the success of the facility, Afreximbank President and Chairman of the Board of Directors, Benedict Oramah, expressed the bank’s dedication to supporting African economies when such assistance is most needed.

“Afreximbank stands by its member countries in good and difficult times. The disbursement of the initial $2.25bn under the facility will support Nigeria’s long-term economic stability, ease access to import financing for raw materials and essential goods, and support industrialisation and trade development efforts,”

“We are pleased that despite the typical year-end pressures, our partners and investors committed the funds required in record time. We thank them for their support,” he added.

Afrexim Bank reportedly engaged oil traders, compensating them with physical cargoes of oil to fund the loan. At the time of the report, the bank was actively determining the specific quantity of oil to offer these traders in return for the provided financing.

The transaction structure has an embedded price balance mechanism where 90 per cent of all excess cash from the sale of the committed barrels (after debt service) will be released to the borrower, while the balance of 10 per cent will be used to repay the facility, effectively shortening the final maturity of the facility and freeing cash flow from future pledged cargoes for use by Nigeria.

NNPCL Group Chief Executive Officer, Mele Kolo Kyari, stated that the proceeds of the facility have been provided to the federal government as one of the strategies to enhance macro-economic stability.

“The participation of global, international and regional syndication firms is a further testament to the lending market’s appetite for financing sponsored by NNPCL and signifies solid market confidence in Nigeria,” Kyari said.