NNPC goes for bank loans to purchase a 20% stake in Dangote Refinery
By Eyo Nsima
The Nigerian National Petroleum Corporation, NNPC, has concluded arrangements to raise bank loans for the purchase of 20 percent stake in the $12 billion Dangote Refinery.
The Group Managing Director, NNPC, Mallam Mele Kyari, said negotiations were ongoing with the selected banks, adding that the bank loans would be backed by cash flows from the project.
In an interview with Channels Television, monitored by The Daily, https://thedaily-ng.com, Kyari, said: “The investment is sustainable and that is why the banks have come forward to lend to us so that we can take equity in this. We are not putting anything at stake.
“The information in the public domain alluding that the investment is inappropriate is not correct. We are very proud that we did. This is good for our shareholders which include 200 million Nigerians, who would have also happily bought shares from this refinery. But have done so on their behalf. Ultimately, the value will come to the country.
“There’s no way you can watch a business of this magnitude, of this sensitive to run without an embodiment of the national oil company. No country does that.”
Also, speaking on refineries rehabilitation, he said: “We are not going to take any government money to overhaul these refineries. We are borrowing also on the back of the cash flows of these refineries. It means they can deliver commercially. Part of the requirements of the lenders is that we should not operate these refineries. We must have Operations and Maintenance contracts. Practically, these refineries will be run by the lenders”.
However, Dangote Fertilizer Limited, which is part of the project, has commenced commercial production of Urea.
Speaking at the commencement of production, June 5, 2021, President of the Dangote Group, Aliko Dangote had, said: “This Phase 1 of the project, which is estimated to cost $2.5 billion, is to manufacture 3mmtpa of urea per annum. This capacity will later be expanded to produce multi grades of fertilizers to meet soil, crop, and climate-specific requirements for the African continent.”
