The United Bank for Africa (UBA) has acted as an initial mandated lead arranger with a consortium of Nigerian commercial and international banks in a $1.5 billion pre-export finance facility for Eagle Export Funding Limited.
In a statement on Wednesday, UBA said the financial package is to enable the forward sale of crude by the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC).
Out of the financing package, UBA is also providing $200 million towards crude oil sale in the country to support investment growth and liquidity requirements.
According to the statement, 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.
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“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 statement read.
“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 €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.”
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Commenting on the recent development, Tony Elumelu, UBA Group chairman, maintained that private sector contribution to economic development is needed considering the challenges posed by the coronavirus pandemic.
“This has been one of the most economically challenging years that Nigeria has witnessed,” he said.
“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.
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“I believe that together, working with governments, we can create more jobs and more wealth for people, not only in Nigeria, but across Africa.”
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.
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