Private sector operations in Nigeria: AfDB grants a line of credit of US $ 40 million to the Guaranty Trust Bank (GTB) in Nigeria
Ouagadougou, le 17 mai 2006 – Mr. Mandla Gantsho, Vice President in charge of Private Sector Operations of the African Development Bank (AfDB) and Mr. Tayo Aderinokun, CEO & Managing Director of the Guaranty Trust Bank (GTB) Plc of Nigeria, signed today a loan agreement of US $ 40 million line of credit (LOC) to support infrastructure and corporate development in Nigeria. The provision of long term lending to this successful Nigeria Bank will assist in the development of Nigeria’s capital markets, supporting the development of investment projects, by small and medium size companies. Currently, Nigeria firms are compelled to fund capital investments with short term resources, a practice which increases risk and curtails the development of long-term projects.
This proposal is consistent with the Nigerian Government’s strategy of mobilising long-term funding for capital investments, and is in line with the Bank’s private sector development strategy. The LOC, through the "wholesale" approach of financial intermediation, will finance and support local Nigerian Corporations and SMEs. GTB has presented a strong and diversified pipeline of projects with expansion plans in sectors such as infrastructures, manufacturing and agriculture.
The facility will help to create a significant number of jobs. The projects financed will promote international trade, and enhance capacity building and Nigeria’s skill base.
Under its private sector window, the Bank has approved financing for eight projects in Nigeria totalling US $ 300 million in the banking, energy, manufacturing and health sectors. 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. 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 engaged in crude oil production. In October 1996, a loan of UA 2.392 million was granted to the Abuja International Diagnostic Centre Limited.
Additionally, 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 and UA 47.50 million to Zenith Bank were approved by the Bank in December 2000, October 2001, September 2002 and January 2005 respectively.
The largest transaction in Nigeria under the Private Sector window was approved in December 2002, whereby the bank provided a USD 100 million loan to NLGN for the expansion of a gas liquefaction plant.