Lagos, 4th of August, 2020; 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.
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 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 an 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 United Bank for Africa is one of the largest employers in the
financial sector on the African continent, with over 20,000 employees
and serving over 20 million customers. UBA operates in 20 African
countries and globally in the United Kingdom, the United States of
America and France, providing retail, commercial and institutional
banking services, leading financial inclusion and implementing cutting
edge technology.