One of the leading financial institution in Nigeria, Zenith Bank Plc, and French Development Agency (Agence Francaise de Development (AFD), operator of France’s bilateral development finance mechanism, have signed a US$100 Million power sector credit facility.
The facility was signed at the Presidential Villa in Abuja during the security summit was witnessed by the visiting French President Francois Hollande and President, General Muhammadu Buhari.
Zenith Bank is obtaining the loan to support new investments in the CAPEX (capital expenditure) of Distribution Companies (DISCOs) in the power sector in Nigeria.
Chairman of Zenith Bank Plc, Jim Ovia led the Bank’s top executives while Laurence Breton-Moyet, Chief Operating Officer and Member of the Executive Board from the AFD Headquarters, Paris, led the AFD team at the occasion.
Here’s what the loan agreement says;
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According to a statement, this facility is aimed at reinforcing, rehabilitating and modernizing the existing distribution networks with the sole target of stabilising the grid. The loan arrangement also provides for technical assistance and other advisory services, both to the benefiting DISCO and the partnership bank.
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A maximum of US$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.
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The agreement provides for technical assistance and other advisory services, both to the benefiting DISCO and the partnering bank.