United Bank for Africa Provides $200 Million for Nigeria’s Petroleum Industry
Timely Financing For Post COVID Economic Growth, Acts as Facility Agent Bank for Nigerian Commercial Banks in the $1.5 Billion Facility to Boost Nigerian Oil Production and Government Revenue.
The United Bank for Africa Plc (UBA), the leading pan-African financial services group, has acted as Facility Agent Bank for the Nigerian Commercial Banks in a consortium with other 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).
UBA is providing $200 million (Naira equivalent) to support investment growth and liquidity requirements. The facility will provide much needed 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. UBA’s position as Facility Agent Bank recognises the Group’s strength in structuring and deploying financing to the oil and gas sector, and the depth and liquidity of the Group’s balance sheet.
The $1.5 billion facility is structured in two tranches. The first tranche of $1 billion, to be repaid over a period of five years, will be provided in dollars. The second tranche of $500 million, will be provided in local currency, over seven years, with UBA acting as Facility Agent Bank, providing $200 million in Naira equivalent.
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. Speaking on this most recent support for the Nigeria’s petroleum industry, UBA Group Chairman, Tony O. Elumelu stated ‘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
You may also be interested in
Presecans top 2020 UBA Foundation National Essay Competition; Winner bags $5,000 Grant for Tertiary Education
Presecans top 2020 UBA Foundation National Essay Competition; Winner bags $5,000 Grant for Tertiary Education Two students from the Presbyterian Boys Senior High School (PRESEC,
Students win 10,000 dollars worth of scholarship from the 2020 UBA foundation national essay competition
Students win 10,000 dollars worth of scholarship from the 2020 UBA foundation national essay competition Hafeez Othman Taqi and Jesse Nicky Kamara of Sierra Leone
Winners Emerge in UBA Foundation’s National Essay Competition Congratulations to Eshiet Abasiekeme of Bright Stars Model Secondary School, Uyo for coming in 1st place in
UBA Foundation’s National Essay Competition 2020 brings out the finest young creative writers in a challenging year 10 out of 12 are girls Lagos, November