Nigeria - Easier access to funding
Total has entered into an agreement with several banks in Nigeria to finance the activities of its local subcontractors. Abolore Solebo, Head of the Upstream Oil & Gas Division at Fidelity Bank in Lagos, explains the principle of the agreement and the benefits it offers.
Total is keen to rely more on the local Oil & Gas industry in the context of its activities in Nigeria. The local companies concerned, however, often had difficulties in accessing finance, either because of the cost or for reasons associated with the level of risk, which financiers were reluctant to take on. Total, therefore put together a group of eight Nigerian banks, including Fidelity Bank, to develop a Contractor Finance Scheme.
The most attractive offer
The principle is simple: when a business, regardless of its size or sector of activity, wins a contract through an invitation to tender from Total and requires financing, Total puts it in touch with the banks in the Scheme. Thanks to the Total Contractor Finance Scheme, the contractor can select the most attractive offer by agreeing to have the payments from the contract paid to the bank that provides the funding.
The agreement creates a virtuous circle that benefits the Nigerian economy.
A virtuous circle
For the Nigerian companies concerned, the Scheme provides a guarantee of access to funding at a competitive interest rate. For the banks dealing with companies selected by Total considerably reduces the risk associated with their capacity to allocate the resources needed and generate profits. For the Nigerian economy, the increasing contribution from the local industry in exploiting national hydrocarbon resources has a beneficial impact on skill levels and therefore on employment. The Scheme therefore creates a virtuous circle as a result.