NNPC confirms loan facility for 20% stake in Dangote Refinery

Chinazor Megbolu

The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), had confirmed the Federal Government will acquire a 20 per cent equity stake in the Dangote Refinery.

The NNPC also said it is in talks with African Export-Import Bank (Afreximbank) for a loan to acquire the stake in Dangote Refinery.

Kyari, in his address on Channels Television’s Sunrise Daily programme on Tuesday, said the stake would be acquired through debt funding by the banks, adding that the NNPC would borrow to acquire equity stake to yield results and dividends for Nigeria instead of using funds from the federation.

“We have been dealing in businesses anchor on the oil and gas sector, and we are doing this for the benefits of Nigerians.

“Our stake in Dangote is 20 per cent against the report of 30 percent. Though valuation is still ongoing, about N19 billion, I’m not sure because it has not closed.

“We started this conversation in December 2020, and banks are comfortable with it and the value,” Kyari said.

He further explained the benefits of the equity investment means proximity of the petroleum product to market, removing the landing cost on transport currently about N21 per litre on fuel and the dividends it would yield for the government and Nigerians.

Kyari said the corporation is presently doing an overhaul turnaround and not just maintenance of local refineries.

“We are doing overhaul turnaround, and the award of contract for Port Harcourt has been concluded.

“The other two refineries — Warri and Kaduna — will be awarded to contractors within two to three weeks, by the end of July, so that these two refineries can run concurrently.

“We are also borrowing for the rehabilitation of these refineries on the back of their cash flows.

“Part of the requirements is that we should not run the refineries. The lenders will do so,” Kyari said.

He pointed out that the efforts would see the country becoming a hub for petroleum supply and legitimately as the supplier for West Africa as a whole