UBA supports Nigeria’s petroleum industry with $200million
To support investment growth and liquidity requirements amid the Covid-19 crisis, the United Bank for Africa Plc (UBA) is providing the sum of $200 million in a consortium of Nigerian commercial and international banks in a $1.5 billion Pre-Export Finance Facility for the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).
According to a statement, the $1.5 billion facility will be disbursed in two tranches. The first tranche of $1 billion, to be repaid over a period of five years, will be provided in dollars, with UBA acting as the Facility Agent Bank. The second tranche of $500 million will be provided in local currency, over seven years, with UBA acting as Lead Bank, providing $200 million in naira equivalent.
Commenting on the support, UBA Group Chairman, Tony O. Elumelu, said: “This has been one of the most economically challenging years that Nigeria has witnessed. With the sharp drop in the price of oil and the ensuing hardship that followed the onset of the Covid-19 pandemic, the private sector must come together and contribute meaningfully to the economy. This facility is clear evidence of this – UBA is providing investment that will significantly improve Nigeria’s production capacity and in doing so also demonstrating the strength, depth, and sophistication of our commercial banking capability. I believe that together, working with governments, we can create more jobs and more wealth for people, not only in Nigeria, but across Africa.”
The $200 million, which will be in naira equivalent, will provide capital for investment in NNPC’s production capacity, which is of strategic importance to the Nigerian economy and the country’s leading source of foreign exchange earnings.
Both facilities will be repaid from an allocation of 30,000 barrels per day of NPDC’s crude oil. UBA has a strong track record in the resources sector across Africa, having facilitated oil prepayment deals with the NNPC, including its 2013 $100 million participation in the PXF Funding Limited transaction, and a further $60 million in the 2015 Phoenix Export Funding Limited transaction. In Senegal, UBA was responsible for the EUR 240m revolving crude oil financing facility for the Société Africaine de Raffinage and in Congo Brazzaville co-funded the $250m crude oil prepayment facility for Orion Oil Limited.
Other participants in the NNPC deal include Standard Chartered Bank, Afrexim Bank, Union Bank and two oil trading companies, Vitol and Matrix.
RECOMMENDED ARTICLES
Comment
No comments found.