First Bank Nigeria Plc is to finance the multi-billion fabrication and construction yard of Kaztec Engineering Limited, a subsidiary of Chrome Group. The project is located at the Snake Island, Lagos.
The bank management led by its Group Managing Director, Mr. Bisi Onasanya, toured the facility to assess the project and determine the level of finding for the company.
First Bank’s Group Executive, Institutional Banking Group, Bashirat Odunewu, told The Nation that the bank was impressed with some of the jobs done by Kaztec for some oil exploration and production companies.
She said Firstbank would finance the project, but did not state to what tune. She said the bank is financing the Chrome Group’s power firm, the Enugu Electricity Distribution Company.
However, she couldn’t confirm whether First Bank alone will finance the Snake Island project, or whether it will be done in partnership with other banks. She only said that as the project is being done in phases, there is a ratio Kaztec has to bring and some that First Bank will fund. Sometimes, we invite some of our colleagues if we need to do syndication. Sometimes, we do it on our own. You know that for the banks, there is a certain limit set by the financial sector regulators and you cannot go beyond that for any particular customer, she added.
On the impression of the bank after the tour, she said: “It was impressive because Kaztec is 100 per cent Nigerian company. They made presentation to us, and we had a walk round the facility. I must say that all the things we saw were very encouraging especially when a Nigerian company can do such good technical work. They showed us what they were doing presently and even those that have been concluded; a lot of engineering and technical works. These are works that are normally given to foreign companies to do in the past. Also, their client, Addax Petroleum, was satisfied with what they are doing. We are interested in what they are doing. We went to see what is on ground and how far we can support them.”
She debunked allegation that First Bank doesn’t finance oil and gas activities. She said: “To say that First Bank is not active in the oil and gas industry is not correct. We are very much involved in the oil industry. We are actually in the fore-front of oil and gas activities. As at today, I think we are among the top three in oil and gas, but we don’t make too much noise about it. Our customers know we are the first point of contact in whatever they want to do because they know we have a lot of expertise in it. Sometimes, we work with our sister company, FBN Capital. So there is hardly any transaction you can talk about in the recent times that we are not part of.
“Also, it is not difficult for Nigerian companies to access facilities from the banks but they need to know that first, they have to be competent, and be able to prove to the bank that they have already invested some of their own equity into the project. In the banking industry, we have what we call bankable projects, so someone doesn’t wake up to say, I want to do a yard like what Kaztec has in the Snake Island, and tells the bank to finance it. The firms have to use some of their own funds. The idea is that when you start, you have to show that you can manage funds on your own, and when the banks see what you are doing and where you are going; they will work along with you. But a lot of people don’t want to do anything on their own first; they want the banks to finance everything. But you must show your own commitment before the banks can come in to assist you. Sometimes, a group can come together to pool resources and once the banks can see how far they have gone, the banks will join them.”
“We were already involved with Kaztec in other areas such as the electricity distribution company in Enugu. We were their banker, so we have a relationship with the company and we know what they are doing. As the banker, we have to know what they are doing, we need to know where the next good transaction is going to happen; there is no more armchair banking.”
The Group Head, Institutional Banking Group – Energy, Mr. Olalekan Adenekan said: “The bank had last year alone, invested over $1.2billion in oil and gas. This comprises upstream- exploration and production; and midstream companies where you find Kaztec. Let me say that Kaztec is really one of the top three companies in Nigeria today and I am happy to say we are in the forefront of supporting all these companies. So in terms of investments, we are very high in the industry.”
Chrome Group’s Business Development & Head Communications, Dr. Edwin Ndukwe, said: “The Snake Island project is being done in phases, phases 1-4. Phase 1 is the fabrication yard, while Phase 2 is the pipe rolling and pipe coating yard. Phase 3 is the drydock yard, where we will be doing the refurbishing and rehabilitation works for boats, tug boat, barges and other marine vessels. The Phase 4 is the logistics base. Right now we are still in the Phase 1. We are anticipating the end of this year for the completion of phase 1. There is work ongoing at the moment, which is establishing the concrete yard, the workshops, the blasting and paint shops, which are all under construction now. By next year, we will be moving into the pipe laying and pipe coating stage.”
