Zenith bank has signed a $100m deal with the Agence Francaise de Development (AFD) to better electricity services in Nigeria.
The $100m deal is a power sector credit facility and will support new investments in the CAPEX (capital expenditure) of Distribution Companies (DISCOs) in the power sector in Nigeria.
The signing was witnessed by Presidents Muhammadu Buhari and Francois Hollande at the Aso Rock Villa, Abuja, during a bilateral session on the 14th of May, 2016.
Under the loan arrangement, a maximum of US$50 million 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 two to three-and-a-half years—depending on the project’s cash flow.
In a nutshell, the AFD facility is aimed at reinforcing, rehabilitating and modernizing the existing distribution networks, which is a prerequisite for the connection of new customers while ensuring the stability of the grid. The loan arrangement also provides for technical assistance and other advisory services, both to the benefiting DISCO and the partnering bank.