Business
Nigeria’s UBA bank seeks to invest in East Africa’s energy and infrastructure
Over the last decade, intra African trade has emerged as a strong driver of growth across the continent.
Competition among financial institutions in East Africa is heating up with the entry of United Bank for Africa (UBA), one of Nigeria’s top five banks, into the region.
UBA Group CEO, Phillips Oduoza, led a delegation of the bank’s senior executives to a series of high level meetings in the East African capitals of Kampala, Dar es Salaam and Nairobi where he expressed interest in providing financial support for projects in transport, oil, gas, power and telecommunications.
UBA plans to set up an energy desk in their Kenyan office that focuses on structuring energy, oil and gas transactions, said UBA Africa CEO Gabriel Edgal.
The bank has its eyes set on financing various projects under Kenya’s Vision 2030, including the upcoming Konza ICT City, having funded crude oil financing in Senegal worth over US$300 million.
In Uganda, UBA is interested in financing infrastructure and the development of the oil and gas sector. Oduoza said they will support projects in the telecommunications, power and construction sectors as well.
Uganda is yet to start sourcing financing for its planned 20,000 barrels per day refinery in the Albertine Graben region in the western part of the country, it is believed Oduoza’s meeting with government officials discussed UBA’s possible role in helping to finance the planned 40 percent stake in the US$2.2 billion development.
UBA is using its experience to convince regional stakeholders of its financial strength. In the past five years, the institution has been involved in arranging financing for various oil and infrastructure projects in Africa worth US$3.5 billion.
Umeme – (an energy distribution network company), another company on UBA’s radar, plans to invest US$300 million in the medium term rolling out prepaid power metering. Umeme also plans to connect 60,000 new customers every year for the next seven years.
With a presence in 19 African countries, UBA has come of age and is ready to take on large multinational banks in international trade.
“Over the last decade, intra African trade has emerged as a strong driver of growth across the continent; however cross border transactions still remain a challenge for Africa. If a Nigerian importer wants to do business with a Ugandan exporter, the letters of credit have to first be approved by a European bank. This obviously takes more time and more money out of Africa,” said Oduoza.
He noted that with the growing difficulties in accessing European markets by African business, as well as the effects of the economic crisis, intra-continental trade presented Africa with a chance for growth, providing the respective governments carry out the needed reforms to ease the cost and speed of doing business.
Africa has a population of over 1 billion people, and this is a great opportunity for African businesses. Right now there is so much unstructured trade across the various borders that could benefit from a well-structured and affordable payments system, and the UBA is in a great position to provide such a service.
Source: The East African