The African Export-Import Bank has joined a consortium of financial institutions in London to sign a landmark syndicated term loan facility for the Bank of Industry of up to two billion euros.
In a statement on Tuesday, the continental bank revealed that it also acted as one of the initial mandated lead arrangers, bookrunner, and facility agent for the deal.
The bank also said it had disbursed its participation amount of €175m in September 2024 in two tranches of €115m in Tranche A and €60m under Tranche B.
Afreximbank was also involved in the processes leading to financial close and disbursement of up to €2bn by all the lenders, including the early bird syndication in August 2024 as the facility agent.
A syndicated facility is a loan or credit arrangement provided by a group of lenders (a syndicate) who collaborate to fund a large borrower, such as a company or government. This structure helps spread the risk among multiple lenders, making it possible to offer a larger amount of financing than a single lender might provide. BOI is expected to use the proceeds of the facility to finance trade and trade-related projects of eligible corporates in Nigeria.
Speaking on the deal, the Senior Executive Vice President at Afreximbank, Mr. Denys Denya, said, “This significant transaction underscores Afreximbank’s commitment to supporting Nigeria’s economic growth. By actively participating as a lender, bookrunner, and agent, we are not only providing crucial financing to the Bank of Industry but also facilitating access to critical resources that will empower Nigerian businesses and drive sustainable development across the country.”
The Managing Director of the Bank of Industry, Dr. Olasupo Olusi, was quoted as saying, “This landmark syndicated facility of up to €2bn is a testament to the confidence global financial institutions have in the Bank of Industry’s track record and its pivotal role in driving Nigeria’s industrial and economic transformation. We are particularly grateful for Afreximbank’s significant participation and unwavering support, both as a lender and facilitator, in this transaction. This funding will empower us to further finance critical projects, ultimately fostering sustainable growth and development for corporates across Nigeria.”
The facility is backed by a first-demand guarantee and is structured into two tranches. Tranche A is guaranteed 85 per cent by the Africa Finance Corporation and 15 per cent by the Central Bank of Nigeria for both principal and interest. Tranche B is 100 per cent guaranteed by the AFC for both principal and interest. The facility has a three-year tenor with quarterly repayments commencing after the first year.
Days ago, BoI announced a $50m loan portfolio guarantee agreement between it and the African Guarantee Fund. Supported by the African Development Bank’s AFAWA initiative, this partnership will drive MSME growth across gender inclusion, youth empowerment, and green initiatives.
By Oluwakemi Abimbola @ThePUNCH
