US$ 40 million line of credit to Guarantee Trust Bank in Nigeria
Private sector operations in Nigeria:
ADB grants a line of credit of US $ 40 million
to the Guarantee Trust Bank (GTB) in Nigeria
Tunis, 12th December 2005 – The Board of Directors of the African Development Bank (ADB) through its private sector window has approved a US$ 40 million line of credit (LOC) for Guarantee Trust Bank (GTB) PLC to support infrastructure and corporate development.
The project involves the provision of a LOC to GTB for project finance and medium term funding. The LOC will be used for on-lending to its corporate and SME clients. The funding will mainly be used to support enterprise expansion and rehabilitation projects, with strong foreign currency income streams. It will also be extended to start-ups with strong export potentials and the ability to service a hard currency loan.
The LOC will also cover asset based financing primarily in the infrastructure sector (energy, telecommunication and transportation). It will also be used in the financing of projects in other sectors such as manufacturing and agribusiness.
The economic benefits likely to accrue from the sub-projects to be financed under the proposed LOC include: foreign exchange earnings by export-oriented enterprises; transfer of technology as a result of importation of plant and machinery; increase in the awareness of entrepreneurs to sound environmental considerations, leading to sustainable development; the availability of medium and long term funding in foreign currency and strengthening local capital markets.
Under its private sector window, the Bank has approved financing for eight 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. 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.
* UA 1 = US$ 1.42414 = NGN 187.274 as at 01/12/2005
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