By Blaise Udunze
Zenith Bank Plc and the French Development Agency (Agence Francaise de Development (AFD), operator of France’s bilateral development finance mechanism, over the weekend in Abuja, signed a US$100 million power sector credit facility to boost new investments in the capital expenditures of Distribution Companies (Discos).
The signing of the facility which took place in the inner chambers of the Aso Rock Villa in the shadow of the security summit was witnessed by the visiting French President Francois Hollande and the Nigerian President, General Muhammadu Buhari. The facility will be a reprieve for the Discos currently weighed down by debt burden worsened by historic debtors comprising mainly government establishments, including the military and security agencies who are indebted to power vendors with over N93 billion.
Leading the team of the bank’s top executives to the bilateral session for signing was Chairman of Zenith Bank Plc, Mr. Jim Ovia, while Mrs. Laurence Breton-Moyet, Chief Operating Officer and Member of the Executive Board from the AFD Headquarters in Paris, led the agency’s team.
Under the loan arrangement, a maximum of US$50million 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 2 – 3 and half years, depending on the project’s cash flow.
The AFD facility is aimed at reinforcing, rehabilitating and modernising 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 Discos and the partnership bank.
Zenith Bank Plc has remained, not only a leading financier of investments aimed at developing the power/energy sector in the country, but also a key player in many other sectors of the economy including; oil and gas, agriculture, manufacturing, communication, transportation, real estate and construction, among others.
In the financial year ended December 31, 2015, Zenith Bank reported a profit after tax (PAT) of N105.66 billion – the highest in the Nigeria banking industry for the year; with total assets at over N4 trillion.
AFD, a public industrial and commercial institution with the status of specialized financial institution, is working in consonance with France’s framework document for development cooperation to combat poverty and promote sustainable development by financing and supporting projects that improve living conditions for populations, promote economic growth and protect the planet.