Zenith Bank Plc and French Development Agency (Agence Francaise de Development (AFD), operator of France’s bilateral development finance mechanism, have signed a $100 million power sector credit facility.
The on-lending term loan being made available to Zenith Bank is to support new investments in the capital expenditure of Distribution Companies (DISCOs) in the power sector.
The facility signing was held on the occasion visit to Nigeria the French President, Francois Hollande and it was witnessed by Presidents Muhammadu Buhari
Chairman of Zenith Bank Plc, Mr. Jim Ovia led the Bank’s top executives while Mrs. Laurence Breton-Moyet, Chief Operating Officer and Member of the Executive Board from the AFD Headquarters, Paris, was the lead for the AFD team at the occasion.
Under the loan arrangement, a maximum of $50 million can be on-lent to any single borrower at single digit interest rate for a tenor of between seven and 12 years, with a moratorium of two to three-and-a-half years—depending on project’s cash flow.
Essentially, the AFD facility is aimed at reinforcing, rehabilitating and modernizing the existing distribution networks, which is a prerequisite for the connection of new customers while ensuring the stability of the grid.
The loan arrangement also provides for technical assistance and other advisory services, both to the benefiting DISCO and the partnering bank.
Zenith Bank Plc, the largest bank in Nigeria by Tier-one capital, has remained a leading financier of investments aimed at developing the power/energy sector in the country. The bank is also a key player in many other sectors, including oil and gas, agriculture, manufacturing, communication, transportation, real estate and construction, etc.
AFD, operator for France’s bilateral development finance mechanism, is a public industrial and commercial institution with the status of specialized financial institution. Its action is in line with the policy set out in France’s Framework Document for Development Cooperation. It works to combat poverty and promote sustainable development by financing and supporting projects that improve living conditions for populations, promote economic growth and protect the planet.
In 2014, AFD allocated EUR 8.1billion to finance projects, including EUR 6.35billion in developing countries and EUR 1.55billion for overseas France.
Comments are closed.