UBA gets $175m AfDB facility to support private sector, infrastructure development
The United Bank for Africa (UBA) has received a US$175m financial package from Africa Development Bank (AfDB) Group to enhance its support to the private sector and financing of infrastructure development in Africa’s largest economy,
The facility is made up of $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt and a $25 million risk participation programme.
This was announced at the weekend by the Pan African development institution having been approved by its Board of Directors.
The long-term senior debt will enhance UBA’s capacity to finance projects in Nigeria in the key sectors of infrastructure, agriculture and related value chains, as well as manufacturing, energy, and SMEs.
The facility will be complemented with technical assistance from the Affirmative Action for Women in Africa (AFAWA) initiative to boost access to finance and technical assistance to women SMEs.
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The trade finance senior debt will provide UBA with much needed countercyclical dollar liquidity to support SMEs and local corporates involved in export-import related activities in the short and medium terms.
The unfunded Risk Participation Agreement aims to strengthen UBA UK’s role as a regional confirming bank and by extension expand access to international markets for largely excluded African issuing banks.
The African Development Bank and UBA UK, a subsidiary of UBA Plc, will share the default risk at 50/50 on a portfolio of eligible trade transactions originated by African issuing banks and indemnified by UBA UK.
Speaking after the Board approval, AfDB’s Group Director-General for Nigeria, Lamin Barrow said, “We are pleased to support UBA with this package, which aligns with four of the African Development Bank’s High five priorities, namely Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialise Africa.”
“This intervention will address unmet demand for trade finance in Nigeria and Africa respectively by providing medium term finance to support exports and the importation of intermediate goods required to sustain vital economic sectors. It will also unlock stable and affordable funding for SMEs which are the engine of Nigeria’s economic growth and employment generation,” said Ahmed Attout, AfDB’s Acting Director for Financial Sector Development, further said
Also commenting, the Group Managing Director/CEO, UBA, Oliver Alawuba said, “This facility will further deepen our support, which has been very considerable, to the critical sectors of Nigerian economy and especially to women-owned businesses and small and medium enterprises, which we consider as the engine of any country’s economic development.”
UBA is a leading pan-African financial services institution with a global footprint. With a history of over seven decades, UBA provides corporate, commercial, SME, consumer, and retail banking services to more than 35 million customers, served through diverse channels. Headquartered in Lagos, Nigeria, UBA has operations in 20 African countries. It also has a presence in the UK, the US, France, Cayman Island and the United Arab Emirates.
