The National Economic Council (NEC) has approved the refinancing of the $3.3 billion Project Gazelle pre-export credit facility with a new $4.5 billion facility known as ‘Project Gazelle 2’.
The approval will allow the Nigerian National Petroleum Company (NNPC) Limited to refinance the $1.5 billion outstanding balance under the original 2023 facility while releasing an additional $3 billion in liquidity to strengthen the country’s external reserves and support ongoing fiscal and infrastructure priorities.
According to Stanley Nkwocha, media aide to the vice president, the council reached the decision virtually during the 159th NEC meeting on Monday.
The decision followed a presentation by Vice President Kashim Shettima, chairman of the council, on behalf of Taiwo Oyedele, the minister of finance and coordinating minister of the economy.
“NEC observed the significance of unlocking additional liquidity to the federation, among other benefits, pledging its support for the actualisation of the initiative,” the statement said.
Following the meeting, Oyedele stated that the refinancing had been constructed on more favourable terms than the original facility.
He stated that officials have cut the volume of crude pledged under the facility from 90,000 barrels per day (bpd) to around 78,750 bpd, marking a 12.5% reduction.
Additionally, the minister noted that under the new arrangement, the federation will receive an additional 11,250 bpd, while the facility will reduce NNPC’s guaranteed crude volumes.
Shettima called for a responsive, scalable, and data-driven social protection policy to tackle Nigeria’s multidimensional poverty.
According to the Vice President, government policies are reflected in the daily lives of citizens through factors such as food prices, healthcare, education, family welfare, investor confidence, and, “most importantly, the development ambitions of state governments.”
Backstory…
On August 16, 2023, the NNPC secured a $3.3 billion emergency crude repayment credit to bolster the naira and stabilize the foreign exchange (FX) market.
The African Export-Import Bank (Afreximbank) arranged the $3.3 billion crude-for-cash loan to support the federal government’s monetary and fiscal reforms.
Under the transaction terms, Nigeria will pay an annual interest rate of 11.85% on the “pre-export finance facility” (PxF).
The borrower, Project Gazelle Funding Ltd (PGFL)—a special purpose vehicle (SPV) created in the Bahamas for the PxF—will handle the debt, while the NNPC serves as the sponsor and will supply oil to the SPV to settle the loan.
The NNPC was required to prepay future royalties and taxes to the federal government.
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