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, 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 modernizing the existing distribution networks with the sole target of stabilizing the grid.
The loan arrangement also provides for technical assistance and other advisory services, both to the benefiting Discos and the partnership bank.
