Paragraph 1: A Landmark Financial Partnership for Nigeria’s Industrial Growth
The Bank of Industry (BOI), a key driver of Nigeria’s industrial and economic development, has secured a landmark syndicated term loan facility of up to €2 billion. This significant financial injection is the result of a collaborative effort by a consortium of international financial institutions, spearheaded by the African Export-Import Bank (Afreximbank). This partnership demonstrates the global financial community’s confidence in BOI’s track record and its crucial role in fostering Nigeria’s economic transformation. The facility is poised to provide vital resources for eligible Nigerian corporations, enabling them to pursue trade and trade-related projects, thereby stimulating economic growth and sustainable development across the country.
Paragraph 2: Afreximbank’s Multifaceted Role in the Syndicated Loan Facility
Afreximbank played a pivotal role in structuring and facilitating this substantial financial package for BOI. The bank acted as one of the initial mandated lead arrangers, bookrunner, and facility agent. This multifaceted involvement underscores Afreximbank’s unwavering commitment to supporting Nigeria’s economic advancement. Beyond its role in securing the loan, Afreximbank also disbursed its own participation amount of €175 million, divided into two tranches: €115 million under Tranche A and €60 million under Tranche B. This direct financial contribution further solidifies Afreximbank’s dedication to empowering Nigerian businesses and fostering sustainable development within the country.
Paragraph 3: Structure and Guarantee Mechanism of the €2 Billion Facility
The €2 billion syndicated loan facility is structured into two tranches, each with a robust guarantee mechanism to mitigate risk for the lenders. Tranche A, totaling €115 million, benefits from an 85% guarantee from the Africa Finance Corporation (AFC) and a 15% guarantee from the Central Bank of Nigeria (CBN), covering both principal and interest payments. Tranche B, amounting to €60 million, is fully guaranteed by the AFC for both principal and interest. This comprehensive guarantee structure ensures the security of the loan and reinforces the lenders’ confidence in the facility’s success. The loan has a three-year tenor, with quarterly repayments commencing after the first year, providing BOI with a manageable repayment schedule.
Paragraph 4: BOI’s Vision for Utilizing the €2 Billion Investment
The Bank of Industry plans to strategically deploy the proceeds of this substantial loan facility to support a wide range of trade and trade-related projects undertaken by eligible Nigerian corporations. This investment is expected to catalyze economic growth across various sectors, create job opportunities, and contribute to the overall development of the Nigerian economy. BOI’s Managing Director, Dr. Olasupo Olusi, expressed gratitude for Afreximbank’s significant support, emphasizing the importance of the facility in empowering BOI to finance critical projects that will drive sustainable growth and development for businesses throughout Nigeria.
Paragraph 5: Afreximbank’s Commitment to Africa’s Economic Development
Afreximbank’s significant involvement in this landmark transaction highlights its dedication to supporting sustainable development across Africa. The bank’s Senior Executive Vice President, Mr. Denys Denya, emphasized the importance of the facility in providing crucial financing and resources to empower Nigerian businesses. Afreximbank’s active participation as a lender, bookrunner, and agent demonstrates its comprehensive approach to fostering economic growth and development within the continent. This commitment extends beyond Nigeria, as Afreximbank continues to seek opportunities to support similar initiatives across Africa.
Paragraph 6: BOI’s Ongoing Efforts to Empower Nigerian MSMEs
In addition to the €2 billion syndicated loan facility, BOI recently secured a $50 million loan portfolio guarantee agreement with the African Guarantee Fund (AGF). This partnership, supported by the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative, focuses on driving the growth of Micro, Small, and Medium Enterprises (MSMEs) in Nigeria, with a particular emphasis on gender inclusion, youth empowerment, and green initiatives. This agreement further underscores BOI’s dedication to fostering inclusive and sustainable economic development by providing crucial support to the MSME sector, which is a vital engine of job creation and economic growth in Nigeria.
