UBA Secures US$175m Facility from ADB For Infrastructure Development, Others
Towards enhancing its support to the private sector and financing of infrastructure development in Nigeria, the United Bank for Africa (UBA) has received a $175 million financial package from the Africa Development Bank (AfDB) Group.
The facility comprised of a $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt and a $25 million risk participation program.
This was announced by the Pan African development institution having been approved by its Board of Directors.
A statement by the Bank, stated that the long-term senior debt will enhance its capacity to finance projects in Nigeria in the key sectors of infrastructure, agriculture and related value chains, as well as manufacturing, energy, and SMEs.
It further stated that 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.
In the same vein, the unfunded Risk Participation Agreement aims to strengthen UBA UK’s role as regional confirming bank and by extension expand access to international markets for largely excluded African issuing banks.
The African Development Bank and UBA UK, a subsidiary of UBA PLC, will 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 (4) of the African Development Bank’s High 5 priorities namely Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialise Africa.
“This intervention will address unmet demand for trade finance in Nigeria and Africa respectively by providing medium term finance to support exports and the importation of intermediate goods required to sustain vital economic sectors,” he said.
Speaking in turn, Ahmed Attout, Acting Director for Financial Sector Development of the African Development Bank said; “It will also unlock stable and affordable funding for SMEs who are the engine of Nigeria’s economic growth and employment generation”.
Also speaking, the Group Managing Director/CEO, UBA, Oliver Alawuba said; “This facility will further deepens 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.”
UBA Plc is a leading pan-African financial services institution with a global footprint. With a history of over 7 decades, UBA provides corporate, commercial, SME, consumer, and retail banking services to more than 35 million customers, served through diverse channels. Headquartered in Lagos, Nigeria, UBA has operations in 20 African countries.
It also has a presence in the UK, the US, France, Cayman Island and the United Arab Emirates.
