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 on-lending term loan being made available to Zenith Bank is to support new investments in the CAPEX (capital expenditure) of Distribution Companies (DISCOs) in the power sector in Nigeria.
The facility signing held on the occasion of the visit to Nigeria of the French President, on Saturday, May 14, 2016, and was witnessed by Presidents Muhammadu Buhari and Francois Hollande at the Aso Rock Villa, Abuja, during a bilateral session.
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 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.
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.
In 2014, AFD allocated EUR 8.1Billion to finance projects, including EUR 6.35Billion in developing countries and EUR 1.55bn for overseas France.
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