The United Bank for Africa Plc (UBA) said it is acting 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).
In a statement, UBA said it was also providing $200 million to support investment growth and liquidity requirements. The facility will provide much needed capital for investment in NNPC’s production capacity, grow the Nigerian economy.
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The $1.5bn facility is structured in two tranches: The first tranche of $1bn to be repaid over five years with UBA acting as the Facility Agent Bank while the second tranche of $500mn, will be provided in local currency for seven years, with UBA acting as Lead Bank, providing $200m.
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.
One of such is its 2013 $100m participation in the PXF Funding Limited transaction, and a further $60m in the 2015 Phoenix Export Funding Limited transaction.
Other participants in the NNPC deal include Standard Chartered Bank, Afrexim Bank, Union Bank and two oil trading companies, Vitol and Matrix.
Commenting, UBA Group Chairman, Tony O. Elumelu said: “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.”
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