AfDB approves $175M package for UBA to boost Nigerian projects, SMEs
The Board of Directors of the African Development Bank Group has given its approval for a $175 million financial package for United Bank for Africa (UBA). The package comprises $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt, and a $25 million risk participation programme.
The long-term senior debt will enable UBA to finance projects in Nigeria, particularly in the sectors of infrastructure, agriculture, manufacturing, energy, and SMEs. To support women-led SMEs, the package will also include technical assistance from the Affirmative Finance Action for Women in Africa (AFAWA) initiative.
The trade finance senior debt will provide UBA with the necessary dollar liquidity to support SMEs and local corporates involved in export-import related activities in the short to medium term.
The unfunded Risk Participation Agreement aims to enhance UBA UK’s role as a regional confirming bank, while also expanding access to international markets for African issuing banks that are largely excluded. The African Development Bank and UBA UK will share the default risk on a portfolio of eligible trade transactions originated by African issuing banks and indemnified by UBA UK.
Lamin Barrow, Bank Group Director General for Nigeria, expressed his satisfaction with the approval, stating that the financial package aligns with the African Development Bank’s priorities of promoting access to energy, boosting agricultural productivity, fostering regional integration, and driving industrialization.
“We are pleased to support UBA with this package, which aligns with four (4) of the African Development Bank’s High 5 priorities namely Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialise Africa,” Lamin said.
Ahmed Attout, African Development Bank Acting Director for Financial Sector Development, highlighted the importance of this intervention in meeting the unmet demand for trade finance in Nigeria and Africa as a whole. He also emphasized that the funding will provide much-needed support to SMEs, which are crucial for Nigeria’s economic growth and employment generation.
“This intervention will address unmet demand for trade finance in Nigeria and Africa respectively by providing medium term finance to support exports and the importation of intermediate goods required to sustain vital economic sectors. It will also unlock stable and affordable funding for SMEs who are the engine of Nigeria’s economic growth and employment generation,” Ahmed noted.
RECOMMENDED ARTICLES
Comment
No comments found.