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Nigerian bank raise low-interest fund to develop oil and gas industry
A consortium of 10 Nigerian banks, led by the United Bank of Africa has boosted efforts by the Nigerian National Petroleum Corporation to accelerate the Nigerian content in the oil and gas industry by floating a $350million single-digit interest Nigerian fund. The fund which was launched by the Minister of State for Petroleum, Dr. Edmund Daukoru, will enable indigenous oil and gas companies to access funds for contracts they could not have handled in the past.
Dr. Daukoru disclosed that already, 50 indigenous oil and gas companies had applied for various sizes of loan facilities, even before the formal launch, and therefore expressed optimism that the fund would immediately deepen the activities among Nigerian operators in the sector. Under the fund deal, UBA Global Markets and BGL Securities would act as the mandated lead arrangers and financial advisers to the NNPC.
The initiative will provide a pool of local funds for the execution of oil & gas projects in the country, thereby gradually reducing the dependence on foreign financial institutions for such funding and also helping to stem capital flight in the industry.
The other banks involved in the initiative include Stanbic, Fidelity, First Bank, Oceanic, Diamond, Guaranty Trust, Bank PHB and Zenith. Citigroup would act as trustee.
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