The Nigerian National Petroleum Corporation (NNPC) on Tuesday said that its planned acquisition of 20 per cent stake in the $12 billion Dangote Refinery would be funded through borrowing
The corporation’s Group Managing Director, Mallam Mele Kyari, who gave this hint during an interview with Channels Television, said that already negotiations were ongoing with some select banks that would provide the loans which will be backed by cash flows from the project.
According to him, the stake in the refinery which might be worth about N19 billion is still under valuation.
Kyari expatiated: “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”, the GMD added
Kyari projected that when the Dangote Refinery becomes operational along with the public refineries currently being managed by the corporation, the country would become a net exporter of petroleum products across the West African sub-region.
He further explained following the successful award of contract for the complete rehabilitation of the Port Harcourt refinery, arrangements were ongoing to also award the contracts for the Warri and Kaduna refineries before the end of July this year.
Admitting that the public-owned refineries were not well managed in the past, Kyari said when fully rehabilitated, the Port Harcourt, Warri and Kaduna refineries would be managed in line with the agreement reached with banks funding the projects.
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”, Kyari added.