CDC Group, the UK’s development finance institution and impact investor, announced a $75m debt commitment to Stanbic IBTC Bank Plc, a subsidiary of Stanbic IBTC Holdings Plc and member of the Standard Bank Group.
CDC said in a statement that the long-term funding would enable the bank to continue lending to businesses in subsectors of the economy important for domestic consumption and exports including food, manufacturing, telecommunications and construction.
The debt commitment will also give Stanbic IBTC access to long-term dollar funding, which is difficult to raise in the commercial market even under normal conditions, according to the statement.
It said the long-term dollar funding would enable Stanbic IBTC to lend to exporting and other dollar-earning businesses in Nigeria, thus supporting key growth sectors of the economy.
The Head of CDC Nigeria Office and Coverage Director, Benson Adenuga, said, “This debt facility is an important step in supporting Nigerian businesses in crucial sub-sectors such as food and agriculture.
“This deal cements our relationships with Stanbic IBTC and Standard Bank Group, both key partners in Nigeria and across the continent. Our patient capital plays an important role in unlocking dollar funding, which is vital to finance longer-term investment projects in Nigeria.”
He said CDC had been investing in Nigeria for over 70 years, with partnerships with nearly 100 companies in the country.
“We continue to prioritise Nigeria as a key investment region,” Adenuga added.
The Chief Executive, Stanbic IBTC Bank Plc, Wole Adeniyi, said the partnership with CDC would strengthen the bank’s commitment to support Nigerian businesses amid the current context.
“Continuing to provide financing to local businesses is fundamental to mitigating the impacts of COVID-19 and accelerating Nigeria’s long-term economic recovery,” he added.
According to the statement, the funding comes at a critical time given the current economic disruption caused by the COVID-19 pandemic, resulting in cash flow and access to finance challenges for companies in Nigeria.
It said, “The subsectors targeted by the facility all employ large numbers of local staff and support substantial SME supply chains.