Chinese oil firm loans Niger $400 million

China National Petroleum Corporation (CNPC) agreed to offer a loan of 400 million dollars to the Niger government, which is struggling with the impact of sanctions.

The loan is seen as one of the first steps to wean financial dependence on the West, with whom the military rulers are increasingly at odds, going as far as breaking military cooperation partnerships.

According to the Nigerien Press Agency, the Chinese company will be repaid with crude oil shipments within 12 months at an interest rate of 7 per cent.

This highlights a growing trend among Chinese companies in Africa where loan payments are linked to resource exploitation.

Niger produces about 20,000 barrels daily, mostly used for domestic consumption. The country however plans to start exporting oil through a pipeline built by the CNPC to Benin this year.

The pipeline would help Niger increase production to 100,000 barrels, offering the landlocked country an export route.