Tuesday , November 24 2020

Oil Loan Facility: UBA Provides $200m for Nigeria’s Petroleum Industry

The United Bank for Africa Plc (UBA), the leading pan-African financial services group, has acted as the lead arranger of 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).

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 Lead Arranger 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, 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.

ALSO READ: UBA Debunks Involvement Reports in N41 Billion NITEL Liquidation Scam

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’.

About Bukola Olanrewaju

Check Also

Access Bank Partners GE Boost Access to Healthcare Infrastructure

Access Bank Partners GE Boost Access to Healthcare Infrastructure

In its continued efforts to revamp Nigeria’s health sector, Access Bank has announced a partnership …

Leave a Reply

Your email address will not be published. Required fields are marked *

Cresta WhatsApp Chat
Send via WhatsApp
WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, how can I help?