P-NG-HAB-013

Project Details
ID: P-NG-HAB-013 Name: ZENITH EMERGENCY LIQUIDITY FACILITY Status: Ongoing Country: Nigeria
Sector: Finance Approval date: 22-Jul-2009 Task Manager: ANSAH Dennis, PISD2
Total cost: 32211500
Currency: UAC
Source(s) of financing
AfDB: 32211721.2
Implementing Agency: ZENITH BANK Plc Location: NIGERIA

Objectives

To increase Zenith's liquidity to underpin the financing of ongoing projects in key sectors and boost productive capacity

Description

The proposed Emergency Liquidity Facility loan of up to USD 50 million is aimed at revamping the client's liquidity to cushion the effects of the financial crisis and lessen potential funding disruptions to vital ongoing projects in the infrastructure and industrial sectors.Currently, Zenith has a pipeline of projects at various stages of implementation totaling USD 106 million in the power, telecoms, transportation, and agribusiness sectors. These projects run the risk of severe delays (with serious financial implications) or possible termination due to the financial crisis which has resulted in commitment cancellations, commercial lenders retreating, and liquidity evaporating from the banking system.

Benefits

The proposed loan under the ELF will enable Zenith Bank to meet its funding commitments to existing subprojects and clients in key sectors of the economy. By facilitating the flow of scarce liquidity to the private sector, the proposed loan will help secure existing jobs, create new employment, grow incomes, and improve living standards.

Rational

The project links to the AfDB's recently approved Emergency Liquidity Fund (ELF) which is designed to help mitigate the negative effects of the global financial crisis on liquidity in its Regional Member Countries (RMCs). The paper underscores the need for ELF interventions to address urgent liquidity requirements of AfDB clients facing financial difficulties due to the withdrawal of international investors, cancellation of credit lines to FIs, and restricted access to debt and capital markets