By Adedapo Adesanya

Oando Plc has confirmed putting down about $550 million in the $925 million crude oil loan financing deal to Nigeria from the African Export-Import Bank (Afreximbank) to support the country’s sustainable development.

The deal named Project Gazelle was sponsored by the Nigerian National Petroleum Company (NNPC), but arranged and coordinated by Afreximbank, involving other crude oil off-takers like Sahara Energy and others.

The total funded facility size for Project Gazelle is about $3.175 billion, a statement from the company said. The project is a $3.3 billion structured crude oil-backed forward-sale finance facility.

The unique financing arrangement is backed by crude oil allocation from the royalties and tax entitlements of the Nigerian government and is a first of its kind in Africa’s largest economy.

The funds were provided to enable the much-required forex injection into Nigeria’s economy, helping the government meet its immediate obligations.

It is also expected to enable investments in critical projects to boost production and in turn, generate increased revenues, part of which would be used in paying off the facility over five years, it noted.

Speaking on Oando’s participation, Mr Wale Tinubu, the chief executive, said the transaction further reinforces the energy firm’s ability to create value and the company’s status as the indigenous partner of choice in Nigeria.

”The successful completion of this facility signifies another win for the company and the country at large. The transaction further reinforces Oando’s ability to create value and the company’s status as the indigenous partner of choice in Nigeria.

“As a proudly indigenous company, our ambition has always been to use our platform to support the sustainable development of the nation. Against this backdrop, Project Gazelle will be instrumental in realising the federal government’s efforts to boost the country’s socio-economic indices.

“Afreximbank as lead arranger continues to support African corporations – public and private growing confidence in the market and continent,” Mr Tinubu stated.

One of the key reasons given for the novel Project Gazelle, Oando said, was its ability to avail the federal government in the immediate to medium term with access to funding for investments in critical sectors that will help in reversing some negative economic indices and trends, while positively impacting the lives of its citizens.

In a joint statement with Afreximbank, NNPC’s Group CEO, Mr Mele Kyari commended the bank’s management and team for their investment philosophy and active interest in the co-creation of prosperity.

“The successful disbursement of the first accordion under Project Gazelle and its interest in funding viable and strategic projects is a clear indication of investors’ confidence in NNPC and Nigeria’s growth aspirations,” he said.

He further assured Afreximbank and all investing communities of NNPCL’s resolve to continue to grow the nation’s hydrocarbon resources and strengthen its partnerships across the oil and gas value chain locally, and globally.

Commenting on the disbursement, President & Chairman of the Board of Directors, Afreximbank, Mr Benedict Oramah, said the funding will greatly support the attainment of Nigeria’s short and long-term economic development priorities

“The milestone achieved thus far, on this facility, demonstrates the bank’s capabilities in performing its role as a crucial development partner for Africa. It reaffirms our commitment to assisting our member states in their efforts to achieve economic growth and stability.

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

Mr Oramah described the original facility as ‘a landmark’ for being the largest crude oil-backed facility in Nigeria and one of the largest syndicated debts raised in Africa.

He added that the closure of the first accordion demonstrated the existence of a positive market appetite for well-structured commodities-backed instruments.

Oando also announced the lifting of the suspension of the company’s secondary securities listing on the Johannesburg Stock Exchange (JSE).

After a two-month suspension, the JSE’s recent action means investors in South Africa are now able to trade in Oando’s securities on the country’s exchange, it said.

Furthermore, Oando said it saw a positive swing in its NGX share price appreciating by 52.8 per cent between April 28 to June 6, 2024, a period that saw the company release its audited FYE2022 results and shortly after at the end of May, its interim FYE2023 results.

It pointed out that investors had shown a strong and positive response to the release of the company’s 2023 unaudited financial reports which showed a major recovery for the indigenous energy company.

“Oando’s FYE2023 interim report showed a 71 per cent increase in turnover from N1.9 trillion in 2022 to N3.4 trillion in 2023 as well as a Profit after Tax position of N74.7billion, a 192 per cent increase from the preceding year.

“After recent upheavals, it looks like exciting times are ahead for Oando, its shareholders, the investing public and the Nigerian economy,” said the statement.