(Bloomberg) -- China’s $400 million deal with Niger to pay for oil in advance will help the West African nation’s junta pay debt it’s accumulated since a military coup last year. 

China National Petroleum Corp. agreed to make an advance payment for crude purchases from Niger’s Agadem field earlier this month, Radio Television du Niger reported on April 13. Niger will use the proceeds to settle debt payments, Ibrahim Hamidou, head of communications for Prime Minister Ali Lamine Zeine, said by phone from the capital, Niamey, on Monday.

The cash-strapped military regime has missed around $600 million of debt payments since seizing power from President Mohamed Bazoum in July, amid sanctions imposed by the regional economic bloc Ecowas, according to UMOA-Titres, the regional market for government securities. Ecowas lifted restrictions last month.

Read More: West African Leaders Lift Sanctions on Niger Months After Coup

Part of the $400 million will go toward settling arrears on Niger’s domestic debt, Hamidou said, while the rest will go toward funding needs in the security, health and education sectors. Niger will pay 7% interest on the advance payment, which will be repaid through the equivalent amount in oil revenue, he said. 

Niger is set to start exporting crude from Agadem by pipeline — which links the field to the port of Cotonou in neighboring Benin — in May. Niger’s share out of the 90,000 barrels transported through the pipeline is about one quarter, out of which CNPC will take 80% of the revenue from crude sales. 

The country’s refinery capacity is about 20,000 barrels per day that mostly supplies Niger’s domestic fuel market.

(Adds detail on Niger’s reimbursement to CNPC in fourth paragraph)

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