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The Board of Directors of the African Development Bank Group (AfDB) through its private sector window has approved a USD 150-million line of credit (LOC) to United Bank for Africa Plc (“UBA”) in Nigeria.
UBA, one of the largest commercial banks in Nigeria, was incorporated in 1961 and operates in a total of 19 African countries whilst providing a wide range of products and services. UBA Nigeria has been the leading financial institution to support various infrastructure projects, particularly power, telecom, transport and also social infrastructure such as hospital and education facilities, and received the African Investor (Ai) Social Infrastructure Deal of the Year Award in 2015. UBA Nigeria operates in all of the country’s 36 states through more than 450 branches supporting 3,700 SMEs.
In 2009, the AfDB provided emergency liquidity facilities to address the surging liquidity constraints, which helped trade finance and other lending activities of UBA contributing to key economic sectors, particularly during the financial crisis.
The LOC will help finance infrastructure and SME projects, including women-owned enterprises in Nigeria. It will support infrastructure development, particularly the power sector, which is a major constraint for Nigeria’s economic diversification and also inclusive growth. The power sector financing gap in Nigeria remains enormous and almost 50% of its population does not have access to electricity.
By leveraging UBA’s branch network, the LOC will also scale up lending to SMEs and women enterprises in both urban and rural areas to create more jobs and to promote inclusive growth for Nigeria’s economy by stimulating the various sectors such as manufacturing, construction, agriculture, education and services.