NNPC diversifies sources of funding

…To obtain $2bn from Japanese consortium

George Frankling

In a bid to diversify sources of funding its projects, the NNPC is to obtain a soft loan of $2 billion from a consortium of Japanese companies led by Japan Bank for International Cooperation at very favourable terms.

The terms comprises of longer tenors, flexible and less onerous provisions as well as no sovereign guarantee, reduced fees and below market interest rate.

Specifically, part of the loan will be used to finance NNPC’ equity in the Brass LNG project which its Final Investment Decision (FID) is expected to be signed in the first quarter of next year.

As a prelude to access the loan, the process was kick-started today in Abuja with discussions between JBIC, NEXIT, LNG Japan, ITOCHU and Sojitz with NNPC top management on country review in support of providing the loan.

The Group General Manager, NNPC Group Public Affairs, Dr. Levi Ajuonuma quoted the NNPC GMD as saying that the NNPC is ready to assist Japan in eliminating the shortfall in energy resulting from the recent Tsunami that hit Japan in both the short and long run in gas and LNG supply.

According to him, NNPC is committed to playing a major role in improving trade and investment between Nigeria and Japan.

“The NNPC is in the process of transformation and we are determined to succeed and the Present administration is behind us,’’ the GMD told the Japanese.

The GMD stated that the Brass LNG is a very viable project that can pay back its loan and is in line with government’s drive to promote and deliver LNG for more revenue.

Meanwhile, the NNPC is to limit its 49% equity holding in Brass LNG to 30% in line with government’s directive and has offered 4%, 3% and 2% to LNG Japan, ITOCHU and Sahara/Sempra respectively.

This will offer the NNPC opportunity to maximize value across the hydrocarbon chain through participation in marketing and distribution of LNG across the world.
It will also offer an off-take right to LNG products by LNG Japan and ITOCHU.

Also speaking during the discussions, the leader of the Japanese team, Kushito gave the assurances the Japanese are ready to do business with NNPC for the benefit of both parties

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