Nigerian Government Greenlights $4.5 Billion Restructuring Plan for $3.3 Billion Crude Oil-Secured Debt

The National Economic Council gave its stamp of approval to refinance the $3.3bn Project Gazelle Pre-Export Finance Facility through a new $4.5bn facility, dubbed Project Gazelle 2, during its 159th meeting, which was held virtually under the chairmanship of Vice President Kashim Shettima.

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This decision was made following a presentation by Dr Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, who highlighted the importance of the refinancing arrangement, which enables the Nigerian National Petroleum Company Limited to refinance an outstanding balance of approximately $1.5bn under the original 2023 facility.

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The refinancing arrangement also unlocks an additional $3bn in liquidity, thereby bolstering Nigeria's external reserves and supporting ongoing fiscal and infrastructure priorities, as disclosed by Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications in the Office of the Vice President.

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In a statement titled 'NEC Approves Refinancing of $3.3bn Project Gazelle to Optimise Cost, Unlock Additional Liquidity,' Nkwocha revealed that the Council recognised the significance of unlocking additional liquidity for the federation and expressed its support for the actualisation of the initiative.

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According to Dr Oyedele, the new arrangement has been structured on considerably more favourable terms than the original facility, including a substantial reduction in the volume of crude oil pledged to secure the loan, from 90,000 barrels of oil per day to approximately 78,750 barrels of oil per day, representing a 12.5 per cent reduction.

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This reduction in pledged volume translates directly into more crude available for the federation to sell and retain revenue from outside the terms of the facility, with an additional 11,250 barrels of oil per day for the federation to be released under the new arrangement.

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Dr Oyedele described the refinancing as a dual achievement, providing improved liquidity access on better terms while simultaneously strengthening the country's overall financing structure, and freeing up resources for strategic national priorities.

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In his opening remarks to the Council, Vice President Shettima called for the design of a responsive, scalable, and data-driven social protection policy to confront multidimensional poverty in Nigeria, highlighting the human impact of government policies on the lives of citizens.

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He argued that government policies have a direct impact on the daily lives of Nigerians, influencing the price of food, the condition of hospitals, the records in schools, and the confidence of investors, and urged Council members to ensure that every decision reached at NEC leaves ordinary Nigerians with confidence that their government is attentive and responsive to their daily struggles.

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Vice President Shettima emphasized the need for the Council to make decisions that assure citizens that their government is paying attention to the pulse of the nation and is resolved to respond with competence, compassion, and purpose.

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Project Gazelle was originally structured in 2023 as a pre-export finance facility secured against future crude oil sales, designed to provide Nigeria with dollar liquidity to defend the naira and support foreign exchange market stability amid sharp currency volatility.

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The refinancing under Project Gazelle 2 extends and restructures the facility on improved terms, reflecting both the larger size of the new facility and NNPC Limited's improved negotiating position following three years of oil sector reforms aimed at attracting fresh investment from international oil companies and boosting domestic production capacity.