Post-COVID-19: UBA announces $1.5bn financing package for NNPC, NPDC

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By Ikenna Omeje

The United Bank for Africa Plc (UBA) has announced a $1.5billion financing package for the Nigerian National Petroleum Corporation (NNPC) and its upstream subsidiary, the Nigerian Petroleum Development Company (NPDC), in its effort to support the rebuilding of the country’s petroleum as a result of the economic downturns occasioned by COVID-19 pandemic on the global economy.

In a release recently, the bank said that it would provide the Naira equivalent of $200 million, out of the financing package, to support investment growth and liquidity requirements of the national oil company while leading a consortium of Nigerian commercial and international banks to arrange the balance $1.3billion as part of a pre-export finance facility for the corporation.

The bank said: “The $200 million facility will provide the 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 Lead Arranger recognizes 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,” it added.

The facility is structured in two tranches, consisting $1 billion in the first tranche, to be provided in dollars, and to be repaid over a period of five years, with UBA as the Facility Agent Bank.

UBA said that the second tranche of $500 million, would be provided in local currency, over seven years, with the UBA acting as Lead Bank, providing $200 million in Naira equivalent, adding that both facilities would be repaid from an allocation of 30,000 barrels per day of NPDC’s crude oil production.

Speaking on the facility, the Group Chairman of UBA, Tony Elumelu, was quoted as saying: “This facility is a clear evidence of this support by UBA, which 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.”

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