The Board of Directors of the African Development Bank Group has approved a $175 million financial package for United Bank for Africa (UBA), comprising $100 million in long-term senior debt, $50 million of trade finance medium-term senior debt and a $25 million risk participation program.
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 Finance Action for Women in Africa (AFAWA) initiative to boost access to finance and technical assistance to women-led SMEs. 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 to medium term.
The unfunded Risk Participation Agreement aims to strengthen UBA UK’s role as 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 50/50 the default risk on a portfolio of eligible trade transactions originated by African issuing banks and indemnified by UBA UK.
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Speaking after the Board approval, Bank Group Director General for Nigeria Lamin Barrow said, “We are pleased to support UBA with this package, which aligns with four (4) of the African Development Bank’s High 5 priorities namely Light up and Power Africa, Feed Africa, Integrate Africa, and Industrialise Africa.”
Ahmed Attout, African Development Bank Acting Director for Financial Sector Development, said:
“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 who are the engine of Nigeria’s economic growth and employment generation.”
About United Bank for Africa Plc: UBA Plc is a leading pan-African financial services institution with a global footprint. With a history of over 7 decades, UBA provides corporate, commercial, SME, consumer, and retail banking services to more than 27 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 and the United Arab Emirates.
