The African Export-Import Bank (Afreximbank) has arranged a syndicated US$3.3bn crude oil prepayment facility sponsored by the Nigerian National Petroleum Company (NNPC) as the country strives to up its oil output.

The initial participating lenders are Afreximbank, Gunvor International and Sahara Energy Resources, an Africa-based energy company.

The “landmark” deal is “the largest syndicated loan ever raised by Nigeria in the international market”, and aims to “enhance Nigeria’s macroeconomic stability and long-term economic growth”, Afreximbank says.

Afreximbank was sole mandated lead arranger, technical and modelling bank, bookrunner, facility agent, offshore account bank, intercreditor agent and collateral agent. United Bank for Africa was the local arranger and onshore account bank.

The five-year facility carries a margin of 6% per annum above the three-month secured overnight financing rate, Afreximbank says.

The transaction is structured so that 90% of all excess cash from the sale of committed barrels, minus the debt owed, will be released and the balance of 10% will be used to prepay the facility. This is intended to shorten the facility’s final maturity and free up cashflow “from future pledged cargoes for use by Nigeria”.

An initial disbursement of US$2.25bn has been made, with the second tranche of US$1.05bn yet to be disbursed, Afreximbank says.

“We are pleased that despite the typical year-end encumbrances, our partners and investors rallied and raised the funds required in record time,” says Benedict Oramah, Afreximbank president and chairman of the board of directors.

NNPC group chief executive Mele Kolo Kyari adds that “the participation of global, international and regional syndication firms is a further testament to the lending market’s appetite for financing sponsored by NNPC and signifies solid market confidence in Nigeria”.

The facility marks another step in Nigeria’s plans to ramp up its oil production after the country’s Dangote refinery, located on the outskirts of Lagos, began production this month following years of delays. It is the continent’s largest refinery, with an expected capacity of 650,000 barrels per day of crude oil.

Yesterday, Shell became the latest energy major to withdraw from Nigerian onshore oil with the sale of its Petroleum Development Company of Nigeria, for an initial US$1.3bn, to a consortium of local exploration and production firms and Swiss-based trader Petrolin, known collectively as Renaissance.

Eni sold its onshore oil production subsidiary last September, while ExxonMobil is in the process of selling its Niger Delta operations.