By LOUIS IBA
General Electric (GE) has signed a framework agreement with five Nigerian banks for the provision of about $500 million (about N88 billion) credit facility to support the construction of the GE manufacturing and assembly facility in Calabar. The local banks that signed the deal are Fidelity Bank, Citibank, Zenith Bank, UBA and Ecobank.
The credit lines would specifically support capital investment, working capital and trade financing for suppliers for the construction of the facility.
“Following the recent announcement of a contractor for the construction of the GE manufacturing and assembly facility in Calabar, GE has taken further steps to ensure that the suppliers servicing the facility have the financial muscle to do so,” the company said in a statement.
“To this end, GE has signed framework agreements with five Nigerian banks that will provide up to $500 million in total financing to the suppliers. The aim is to have a financing programme that provides favourable financing terms with GE support. Each of the financing institutions will provide a line of credit from $50 million up to $100 million.
In addition, GE is working with the Nigerian Content Development Fund (a subsidiary of the NCDMB) to provide further financing options and enhancements.
According to the President and CEO of GE Nigeria, Dr. Lazarus Angbazo, the move represents a watershed in supplier financing and efforts to boost government’s local content policy in the oil and gas and other sectors. He said the suppliers that have been pre-qualified and would benefit from the loan facility are new and established Nigerian companies, adding that GE will use its substantial purchasing volume to underpin the banks and their financing facilities.
Angbazo noted that, “with the investments in the Calabar plant, GE plans to significantly increase its supplier base from 40 local suppliers to 100 within the next five years.” He added that GE will continue to support SME suppliers with Supplier Business Development Services and Technical Development Support to assist them in meeting GE’s global supplier qualification criteria.
Speaking at the occasion, Dr. Olusegun Aganga, Minister of Industry, Trade and Investments, who presided over the signing of the deal praised the parties for their focus on stimulating industrial growth in Nigeria. He called for more creativity out of the Nigerian financial services industry “to bring the same range of competitive financial products for small businesses as they exist across the globe.”
Source : SunOnline