Afreximbank has approached oil traders to finance a $3 billion loan to the Nigerian National Petroleum Company (NNPC) Limited, which is central to the country’s efforts to support the naira.
On August 16, 2023, the NNPC secured a $3 billion emergency crude repayment loan to support the naira and stabilise the foreign exchange (FX) market.
A Reuters report on Wednesday, quoted sources to have said that Afreximbank approached traders in recent weeks seeking their interest in funding the oil-backed loan to NNPC.
According to the sources, Afreximbank is working to craft terms to offer to the trading houses.
“There is a lot of interest, but they need to see terms,” an oil industry stakeholder told Reuters.
The source, who could not be named because he was not authorised to speak publicly on the issue, added that oil prices climbing past $90 per barrel would help drive interest.
One of the sources also told Reuters that traders who put up cash would be repaid in physical cargoes of oil.
“The bank is working to determine how much oil to offer those traders in exchange for the financing,” Reuters said.