In a Statement on Monday, the United Bank for Africa (UBA) Plc announced that it has received a $175 million financial package from the Africa Development Bank (AfDB) Group.
The bank maintained that the fund would enhance its support to the private sector and financing of infrastructure development in Africa’s largest economy.
According to UBA, “This facility comprises $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt and a $25 million risk participation program.
“The long-term senior debt will enhance our capacity to finance projects in Nigeria in the key sectors of infrastructure, agriculture and related value chains, as well as manufacturing, energy, and SMEs.
“The facility will be complemented with technical assistance from the Affirmative Action for Women in Africa (AFAWA) initiative to boost access to finance and technical assistance to women SMEs.
“The trade finance senior debt will provide UBA with much needed countercyclical dollar liquidity to support SMEs and local corporates involved in export-import related activities in the short to medium term.”
It emphasized that the unfunded Risk Participation Agreement aims to strengthen UBA UK’s role as a regional confirming bank and by extension expand access to international markets for largely excluded African issuing banks.
The statement added that the AfDB and UBA UK, a subsidiary of UBA Plc, would share 50/50 the default risk on a portfolio of eligible trade transactions originated by African issuing banks and indemnified by UBA UK.
Speaking after the Board approval, AfDB’s Group Director General for Nigeria Lamin Barrow, said, “We are pleased to support UBA with this package, which aligns with four of the AfDB’s High 5 priorities namely Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialize Africa.”
“This intervention will address unmet demand for trade finance in Nigeria and Africa respectively by providing medium term finance to support exports² and the importation of intermediate goods required to sustain vital economic sectors.
“It will also unlock stable and affordable funding for SMEs who are the engine of Nigeria’s economic growth and employment generation,” AfDB’s Acting Director for Financial Sector Development, Ahmed Attout said.
On his part, the Group Managing Director/CEO, UBA, Oliver Alawuba said, “This facility will further deepen our support, which has been very considerable, to the critical sectors of Nigerian economy and especially to Women-owned businesses and small and medium enterprises, which we consider as the engine of any country’s economic development.”
|Arise News
