The petroleum industry in Nigeria has received a boost following the provision of $200 million for the sector by the United Bank for Africa (UBA) Plc.
The lender, in a statement on Wednesday, said it made the provision of the fund as an initial mandated lead arranger with a consortium of Nigerian commercial and international banks for $1.5 billion facility to support the Nigerian oil production and government revenue.
The $1.5 billion pre-export finance facility is to enable the forward sale of crude oil by the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).
In a statement, UBA said it will provide the Naira equivalent of the $200 million towards the crude oil sale to support investment growth and liquidity requirements.
It noted that the forward sale 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 has a strong track record in the resources sector across Africa, having facilitated similar oil prepayment deals with the NNPC.
The lender was also responsible for the €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 participants in the Eagle Export Funding Limited deal include Standard Chartered Bank, Afrexim Bank, Union Bank and two oil trading companies, Vitol and Matrix.
Chairman of UBA Group, Mr Tony Elumelu, stated that “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.”
