Afreximbank strengthens Nigeria’s industrial growth with €2bn syndicated loan participation  

The African Export-Import Bank (Afreximbank) has reinforced its commitment to Nigeria’s economic development by playing a key role in a €2 billion syndicated loan facility for the Bank of Industry (BoI). The transaction, finalized in London, marks a significant milestone in collaborative financing for industrial growth in Nigeria.

In a statement on Tuesday, Afreximbank disclosed its pivotal involvement as an initial mandated lead arranger, bookrunner, and facility agent in the syndicated term loan. The bank announced that it had disbursed €175 million in September 2024, divided into two tranches €115 million under Tranche A and €60 million under Tranche B.

This loan facility, structured with contributions from multiple global financial institutions, is designed to support trade and trade-related projects for eligible Nigerian corporates. It leverages a syndication model that spreads risk among lenders, allowing for large-scale financing beyond the capacity of a single institution.

Afreximbank’s Senior Executive Vice President, Mr. Denys Denya, highlighted the bank’s strategic role in the deal, emphasizing its alignment with Nigeria’s development goals. “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,” Denya stated.

Managing Director of BoI, Dr. Olasupo Olusi, lauded the global confidence in the bank’s capacity to transform Nigeria’s economy. “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,” he said.

The €2 billion facility is divided into two tranches, each backed by robust guarantees. Tranche A is secured 85 per cent by the Africa Finance Corporation (AFC) and 15 per cent by the Central Bank of Nigeria, covering both principal and interest. Tranche B, meanwhile, is fully guaranteed by the AFC. The facility has a three-year tenor with quarterly repayments commencing after the first year.

This financing follows a series of strategic initiatives by BoI to enhance its impact on Nigeria’s industrial landscape. Recently, the bank announced a $50 million loan portfolio guarantee agreement with the African Guarantee Fund, aimed at driving growth in micro, small, and medium enterprises (MSMEs), promoting gender inclusion, youth empowerment, and green initiatives.

The syndicated loan facility is expected to unlock critical funding for Nigerian businesses, enabling them to expand their operations and contribute to the country’s economic diversification.

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