Official: Dangote Refinery took $1 billion loan from NNPCL before coming on steam

The Dangote Refinery came online thanks to a $1 billion loan secured by crude oil, according to the Nigerian National Petroleum Company Limited (NNPCL).

According to a Punch report, this was said by Olufemi Soneye, the chief corporate communications officer for the NNPCL, during the Energy Relations Stakeholders Engagement in Abuja on Monday, December 16.

“The Dangote Refinery was supported during liquidity issues by a calculated move to get a $1 billion loan guaranteed by NNPC’s crude, opening the door for the construction of Nigeria’s first private refinery.

He was cited as saying, “This initiative underscores NNPC’s dedication to fostering public-private partnerships that drive national development.”

Soneye did not, however, provide information about the terms of the arrangement or the payment procedures for the $1 billion that the NNPCL had obtained on behalf of Dangote Refinery.

He also alluded to the $3.3 billion Gazelle loan that the state-owned oil corporation facilitated as a crucial step to help stabilize the foreign exchange issue in the federation.

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Recall that the African Export-Import Bank (Afreximbank) and the NNPCL announced a syndicated $3.3 billion crude oil prepayment facility in January of this year.

According to this organization, there are still unresolved issues about the $3.3 billion crude-for-cash loan from Afreximbank to NNPCL.

With the facility, the NNPCL aimed to stabilize the value of the Nigerian Naira, however several experts expressed concern about potential hazards.

The naira depreciated further against the dollar, from roughly N960 per dollar in January to N1,500 in December, in spite of the crude-for-cash agreement.
According to the bank, the transaction was one of the biggest syndicated debts created in Africa and the biggest crude-backed facility in Nigeria.

Bismarck Rewane, the CEO of Financial Derivatives Company Limited at the time, voiced concern about the NNPCL’s arrangements, stating that the naira had been under pressure in spite of them.