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 $100m 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 President Muhammadu Buhari and the visiting French President Francois Hollande.
The facility will be a reprieve for the Discos that are currently weighed down by the burden of debt, with historic debtors made of mainly government establishments, including the military and security agencies alone accounting for over N93bn.
Leading the team of the bank’s top executives to the bilateral session where the pact was sealed 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 $50m can be on-lent to any single borrower at a 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 Disco 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.