The African Export-Import Bank (Afreximbank) has signed a $1.04 billion loan agreement with the Nigerian National Petroleum Corporation (NNPC) to finance exploratory activities in the country. The agreement was concluded yesterday in Durban during the second intra-Africa trade fair, which opened on 15 November and runs until 21 November, the bank said in a statement.

The transaction comprises a Pre-Export/Shipment Finance Facility underpinned by a Forward Sale Agreement (FSA) and Offtake Contracts from the NNPC acting as the Borrower and Seller.

NNPC will enter an FSA within which it shall deliver 35,000 barrels of crude oil per day, according to the statement.

Signed by Mr. Umor Ajia, NNPC Executive Director and Group Chief Executive Officer on behalf of NNPC, the transaction complies with Afreximank’s mandate to promote local content in Africa’s oil and gas and other mining industries and generate foreign receivables into Africa.

While lauding the deal as very innovative, Afreximbank President and Chairman of the Board of Directors, Prof. Benedict Oramah, explained the bank’s decision in the context of the world’s climate change agenda, saying this is a case of adopting a balanced approach.