The African Development Bank boosts SMEs in Nigeria
Approves US$ 100 Million Line of Credit to Zenith Bank
Tunis, 13 December 2006 - The Board of Directors of the African Development Bank (AfDB) approved on Wednesday in Tunis, under its private sector window, a second Line of Credit (LOC) of US$ 100 million to Zenith Bank of Nigeria.
The first line of credit of USD 70 million extended to Zenith Bank in 2005 has been on-lent to 12 (twelve) sub-projects, which has lead to a creation directly or indirectly of over 2000 jobs. The first LOC provided long-term financing to manufacturing, oil and gas services and telecommunication sectors. This additional LOC will bring the total facilities to Zenith Bank to the amount of $170 million, thereby making it the single largest investment by ADB in any financial institution in Nigeria.
The second LOC (LOC II) is aimed at extending additional resources to Zenith Bank which will finance infrastructure projects, corporate entities in the agribusiness, energy, telecommunications manufacturing and extractive industries. Through this line of credit, Zenith Bank will be able to provide medium to long-term funding in Nigeria that is currently not readily available to corporate entities in the country. Provision of such long term funding is fundamental for the implementation of investment plans and the development of the private sector and the country’s economy. The provision of the LOC is also consistent with the Nigerian Government’s strategy of mobilizing long-term funding for capital investments.
To date under its private sector window, the Bank has approved financing for nine projects in Nigeria. In October 1992, the Bank approved a loan of UA 3.987 million to Spintex Nigeria Limited to finance the expansion of a polyester yarn plant to meet additional demand. In September 1993, the Bank extended a loan of UA 7.973 million to Consolidated Oil Limited (Conoil), an indigenous oil and gas exploration company for crude oil production. In October 1996, a loan of UA 2.392 million was granted to the Abuja International Diagnostic Centre Limited.
Lines of Credit of UA 23.9 million to United Bank of Africa (UBA), UA 13.8 million to FSB International Bank, UA 37.7 million to Citibank, UA 47.50 million to Zenith Bank and UA 27.4 million to GTB were approved by the Bank in December 2000, October 2001, September 2002, January 2005 and December 2005 respectively.
Through the Private Sector, the Bank window also has also invested in the oil and gas sector through a USD 100 million loan to NLNG to finance the expansion of a gas liquefaction plant located on Bonny Island.
* 1 UA = € 1.14; 1 UA = 1.50 USD as of December 2006
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