A Boost to the Nigerian Financial Sector US $ 70 Million Line of Credit to Zenith Bank by the AfDB
The Line of Credit to Zenith will be used for on lending to its corporate clients, including SMEs through long-term project finance. The AfDB resources will mainly be used to support enterprise expansion and rehabilitation projects, with strong foreign currency income streams. The LOC will cover asset based financing in the manufacturing, agribusiness, transportation, telecommunication, energy, and tourism sectors, amongst others.
Through the provision of this LOC, the ADB will contribute to (i) reinforcing Zenith’s financial intermediation in Nigeria, (ii) developing the domestic financial sector, and (iii) creating approximately 1,500 jobs by 2010. This project is in line with the Bank’s private sector strategy of intervention to promote SMEs and corporate development through its technical and financial support to local financial intermediaries.
To date, under its private sector window, the Bank has financed seven projects in Nigeria, for a total of US $ 236 million, including, (i) a loan of US $5 million to Spintex Nigeria Limited to finance the expansion of a polyester plant, (ii) a loan of $ US 10 million to Consolidated Oil Limited (Conoil), to support crude oil production; (iii) a LOC of $ US30 million to United Bank of Africa (UBA), (iv) a LOC of $ US18 million to FSB International Bank; (v) a loan of $ US 3 million to a health clinic; (vi) a US $ 100 million loan to NLGN for the expansion of a gas liquefaction plant, and (vii) the LOC to Zenith Bank.
The Bank Group has since 1971 approved 32 operations in favour of Nigeria for a total amount of UA 1.6 billion. Total disbursements amount to UA 1.3 billion equivalent to US$ 1.9 billion.
* 1 UA = US$ 1.55301 as at 01/01/2005