FG Signs Off on $4.5bn NNPCL Funding Arrangement
The Federal Government has approved a $4.5 billion funding arrangement for the Nigerian National Petroleum Company Limited (NNPCL), a move aimed at refinancing existing obligations, strengthening Nigeria’s foreign exchange reserves and supporting key infrastructure projects.
The approval was granted by the National Economic Council (NEC) during its meeting on Monday after members considered the financing proposal presented by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele.
According to a statement issued by the Office of the Vice President on Tuesday, the facility is a refinanced pre-export crude arrangement secured with 78,750 barrels of crude oil per day supplied by NNPCL.
The statement said the arrangement is expected to free up resources for strategic national priorities while strengthening Nigeria’s financing framework.
Under the agreement, $1.5 billion will be used to refinance the outstanding balance of an NNPCL loan obtained in 2023, while the national oil company will receive $3 billion in fresh financing.
The proceeds are expected to cover tax and royalty obligations owed to the Federal Government, as well as other outstanding liabilities.
However, the government did not disclose the tenure of the financing arrangement.
The approval comes months after Nigeria secured a $5 billion Total Return Swap facility with First Abu Dhabi Bank, from which the government has already accessed $1.5 billion.
Nigeria has also recorded steady improvements in crude oil production, with average output rising to 1.5 million barrels per day this year and reaching 1.56 million barrels per day in June, the highest level since April 2020.
The Federal Government is targeting production of three million barrels per day by 2030.
The latest arrangement replaces a similar crude-backed financing facility secured in 2023, which had a five-year tenure and was backed by 90,000 barrels of crude oil per day.
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