The United Bank for Africa Plc (UBA) has announced a $200 million facility support to boost Nigeria’s crude oil production capacity.The facility is part of a $1.5 billion Pre-Export Finance Facility supplied through consortium of Nigerian industrial and global banks, with UBA as the lead arranger, for the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).The financial institution in a announcement, announce the deal said it will provide $200 million to help funding growth and liquidity requirements.
It stated: “The facility will grant a whole lot wished capital for investment in NNPC’s manufacturing capacity, which is of strategic importance to the Nigerian financial system and the country’s leading supply of overseas exchange earnings. UBA’s role as Lead Arranger recognises the Group’s energy 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 supplied in dollars, with UBA acting as the Facility Agent Bank. The 2nd tranche of $500 million, will be provided in nearby currency, over seven years, with UBA performing as Lead Bank, supplying $200 million in naira equivalent.
“Both services will be repaid from an allocation of 30,000 barrels per day of NPDC’s crude oil. UBA has a robust music report in the resources area across Africa, having facilitated oil prepayment deals with the NNPC, including its 2013 $100 million participation in the PXF Funding Limited transaction, and a in addition $60 million in the 2015 Phoenix Export Funding Limited transaction. In Senegal, UBA was once accountable for the EUR 240 million revolving crude oil financing facility for the Société Africaine de Raffinage and in Congo Brazzaville co-funded the $250 million crude oil prepayment facility for Orion Oil Limited.
“Other members in the NNPC deal include Standard Chartered Bank, Afrexim Bank, Union Bank and two oil buying and selling companies, Vitol and Matrix.”Speaking on this development, UBA Group Chairman, Tony O. Elumelu cited “This has been one of the most economically challenging years that Nigeria has witnessed. With the sharp drop in the charge of oil and the ensuing hardship that accompanied the onset of the Covid-19 pandemic, the non-public area should come collectively and make a contribution meaningfully to the economy.
