Post-COVID-19: UBA provides $200m for Nigeria’s petroleum industry

…also acts as lead arranger for $1.5bn facility to boost Nigerian oil production, government revenue

by Per Second News August 4, 2020, 4:20 pm 18 Comments

Mr. Tony Elumelu

The United Bank for Africa Plc (UBA) says 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) is being provided by it and a consortium of Nigerian commercial and international banks.

UBA, the leading pan-African financial services group, acted as an Initial Mandated Lead Arranger of the consortium, 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 Mandated 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, it said in a statement emailed to PerSecondnews.

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 similar oil prepayment deals with the NNPC. UBA was also 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.

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 Ltd.

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 saud: “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.”UBA 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.

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Nigeria post covid-19 Tony Elumelu UBA