Economy Watch

First Bank is financing the Energy Sector for Infrastructural Development- Aina

October 25, 20220401

Mrs. Oluwatoyin Aina, Head Energy, Downstream and International Oil Trading, First Bank Plc

-By Felix Douglas

Ever since the Petroleum Industry Act (PIA) came to into existence which is to strengthening administrative governance in the oil and gas industry, stakeholders have embraced the Act.

One of the major stakeholders of the energy sector is the financial institutions that have played vital roles in injecting funds to the industry.

Nigeria’s pioneer financial institution, First Bank of Nigeria (FBN) has financed numerous projects in the energy sector.

Speaking at the ongoing Oil Trading and Logistics (OTL), Africa Downstream Week, Oluwatoyin Aina, Head Energy, Downstream and International Oil Trading (First Bank Plc), revealed that the bank on like other financial institutions, provided funding for infrastructural development including the NLNG Train 7 project.

She disclosed that the newly commissioned Pinnacle offshore subsea petroleum terminal and Dangote refinery were parts of the projects the bank funded.

However, she cautioned that no commercial bank will be interested in funding a Green Field project 100% except the Sponsors have injected substantial amount of Equity in combination with funding from DFIs, Multilateral Agencies, etc to achieve a good funding mix. This will help achieve a lower Weighted Average Cost of Capital throughout the project lifecycle. It will also reduce pressure on future cashflows.
Stakeholders need to attract different funding sources without focusing on only one.
The First Bank Downstream Head, advised stakeholders on good effective corporate governance structure to access fund.

Carbon credit also assists project to be bankable with neutrality in the process. There has to be sanctity of contract with focus on project that attract net zero emission.  International fund can only attract projects that are environmentally friendly as they would be thoroughly assessed to ensure standard.

Aina advised oil and gas companies to create enabling environment, accessible capital pool, skill acquisition and human capital development.  Packaging of documents to attract fund.

Thus: “Oil and gas producing continues in Africa, must focus on the process of creating enabling environment through policies, improving accessibility to available capital pools and attracting the right skills.”

Aina opined that First Bank being in the forefront will continue to support energy based project.

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