Nigeria's National Economic Council (NEC) has given its approval for a new $4.5 billion pre-export finance facility, dubbed "Project Gazelle 2." This facility is intended to refinance the outstanding balance of approximately $1.5 billion from an original $3.3 billion loan secured by the Nigerian National Petroleum Company Limited (NNPC) in late 2023. The remaining $3 billion from the new facility will be directed to the Central Bank of Nigeria (CBN) to bolster the nation's external reserves, which is crucial for stabilizing the Naira and supporting the government's fiscal and infrastructure priorities.
The refinancing under Project Gazelle 2 comes with more favorable terms for Nigeria. Notably, the volume of crude oil pledged as collateral has been reduced by 12.5%, from 90,000 barrels per day (bpd) to 78,750 bpd. This reduction frees up 11,250 bpd, which, at current Brent crude prices near $80 per barrel, translates to approximately $27 million in unencumbered monthly revenue for the Federation Account.
Vice President Kashim Shettima, who chaired the NEC meeting, highlighted the importance of unlocking this additional liquidity for the federation. The Coordinating Minister of the Economy and Minister of Finance, Taiwo Oyedele, presented the refinancing plan to the council. This financial restructuring aims to provide critical fiscal breathing room for Nigeria amidst domestic inflation and global interest rate pressures, allowing for the redeployment of resources for strategic national priorities.
According to an earlier report from 2024, the NNPC had serviced part of the original $3 billion loan by lifting $991 billion worth of crude oil, leaving an outstanding balance of $3.8 billion as of December 31, 2024. The interest rate for the original facility was 3-month SOFA plus 6.5%, along with a margin and liquidity premium of 0.5% each.
