Oando announces $550 million participation in NNPCL-sponsored finance facility

Oil driller Oando Plc said it partook in the closure of a $925 million accordion arranged and coordinated by the African Export-Import Bank (Afreximbank) for Project Gazelle, a crude oil-backed forward-sale finance facility sponsored by Nigerian National Petroleum Corporation Limited (NNPCL).

An accordion allows a borrower to increase the maximum limit permitted on a loan facility or add a term loan to an existing loan agreement.

Under the accordion arrangement, Oando contributed $550 million through its subsidiary Oando Trading according to a statement seen by PREMIUM TIMES, while other parties raised the remaining $375 million, all summing up to $925 million.

NNPCL last year helped the Nigerian government source a $3.3 billion crude oil prepayment loan from Afreximbank through a special purpose vehicle called Project Gazelle Funding Limited.

Repayment is to be made with a pre-agreed number of barrels of crude oil in addition to an interest element of 11.85 per cent annual yield.

The proceeds of the facility, NNPCL said, would help provide short to mid-term solutions to perennial dollar scarcity in the Nigerian foreign exchange market.

Sahara Energy Resource Limited also participated in the latest accordion arrangement.

“As a proudly indigenous company our ambition has always been to use our platform to support the sustainable development of the nation,” Oando’s CEO Wale Tinubu said.

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“Against this backdrop, Project Gazelle will be instrumental in realizing the Federal Government’s efforts to boost the country’s socio­economic indices.”

Afreximbank acted as mandated lead arranger, bookrunner and facility agent for the deal.

The latest accordion arrangement raises the total amount disbursed so far to $3.175 billion, Afreximbank said in a separate statement.

The facility “reaffirms our commitment to assisting our member states in their efforts to achieve economic growth and stability,” Benedict Oramah, president of Afreximbank, said.

“This funding will greatly support the attainment of Nigeria’s short and long-term economic development priorities,” he added.

The original facility, the Afreximbank chief said, is the biggest crude oil-backed facility in Nigeria and one of the largest syndicated debts raised on the continent.