The Nigerian National Petroleum Company Limited (NNPCL) has successfully repaid 60% of a $1.036 billion loan that it took in September 2021 to finance the acquisition of a 20% stake in the Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (DPRP FZE).
As of December 31, 2023, NNPC had repaid $625 million of the principal amount, leaving an outstanding balance of $424 million on the principal loan amount.
The source of this loan and the details of the repayment are documented in the NNPCL’s financial statement for the year ended December 31, 2023, under the section titled “Financing of investment in Dangote Refinery.”
The loan was secured through a forward sale agreement with Lekki Refinery Funding Limited, with an interest rate of 3-month LIBOR plus 6.125%.
A part of the financial statement read: “In September 2021, NNPC entered into a forward sale agreement with Lekki Refinery Funding Limited to supply 35,000 bbl. of crude oil per day for the settlement of the $1.036 billion (N426.2 billion) funding received for the financing of investment in Dangote Refinery.
“The interest rate for the facility is 3-month LIBOR plus 6.125%. As of 31st December 2023, NNPC limited has paid $625 million principal, while $424 million (N324 billion) is still outstanding.”
Initially, this investment was managed by NNPC Greenfield Limited, a special-purpose vehicle wholly owned by NNPC.
However, following the restructuring of NNPC under the Petroleum Industry Act (PIA), the management of this investment was transferred to NNPC Downstream Investment Service (NDIS).
The restructuring also led to a significant change in the payment structure. The balance of the cost of equity investments, amounting to $1.76 billion, was agreed to be paid in cash instead of the originally proposed crude oil discount of $2.5 per barrel on the official selling price of crude oil.
As of December 31, 2023, NNPC Limited holds a 7.25% interest in DPRP FZE.
