The United Bank for Africa Plc (UBA), has acted as facility agent bank for the Nigerian commercial banks in a consortium with other international banks in a pre-export finance facility for the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).
According to the deal announced this week, UBA will be providing $200 million 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.
The $1.5 billion pre-export finance facility is structured in two tranches of $1 billion, to be repaid over a period of five years and the second one $500 million.
This will be provided in local currency, over seven years, with UBA acting as facility agent Bank, providing $200 million.
Both facilities will be repaid from an allocation of 30,000 barrels per day of NPDC’s crude oil.
Other participants in the NNPC deal include Standard Chartered Bank, Afrexim Bank, Union Bank and two oil trading companies, Vitol and Matrix.
“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,” said UBA group chairman, Tony O. Elumelu.
This facility is clear evidence of that 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.”