The Bank of Industry (BOI) at the weekend signed a $750 million syndicated three-year tenure facility with Afreximbank. Similarly, Dangote Group has also signed a $600 million seven-year facility with the bank.
Whilst the BOI facility comes with one year grace period and a repayment period of two years, the Dangote facility comes with a five years’ grace period and two years repayment plan. The loan is to finance Dangote Refinery being built in Lagos. Both facilities were signed during the annual general meeting of the Afreximbank held Saturday in Abuja.
Speaking to journalists after signing the facility, the Managing Director/CEO of BOI, Mr. Olukayode A. Pitan, said this is the first time BOI will be taking such a facility and it’s the beginning of bigger financing options.
“This money is medium term, which is three years and the interest is Libor plus 6 percent which is very good when you look at the rate Nigeria usually borrows” he said.
Libor stands for London interbank offered rate. It’s the interest rate at which banks offer to lend funds (wholesale money) to one another in the international interbank market.
Pitan said BOI is taking the facility to support industries, creative sector, mining explorations and small and medium term enterprises.
According to him, with the arrangement with the CBN, that bank will lend at less than 10 percent interest per annum.
On the foreign currency risks he said “all of these monies have been swopped 100 percent with the central bank of Nigeria. By the way, without the support of the CBN, the ministry of finance and ministry of trade and industry, and a few other parastatals this wouldn’t have been possible. What this loan allows us to do is that it gives us additional N250bn depending on the exchange rate that is used, between N230bn to N250bn to deploy to the industrial sector” he said.