Nigeria Draws First $1.5bn From $5bn Abu Dhabi Financing Deal — Oyedele

The Federal Government has confirmed it has accessed the first $1.5 billion under its $5 billion financing arrangement with First Abu Dhabi Bank (FAB), marking the initial drawdown from the facility approved to support infrastructure development, budget implementation and debt refinancing.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this while briefing journalists after the Federal Executive Council (FEC) meeting in Abuja on Monday.

The confirmation is the first official acknowledgement that Nigeria has begun utilising the financing package.

Oyedele said the facility had already received the approval of the National Assembly and was designed to help the government refinance expensive debt, fund critical infrastructure projects and support budget implementation.

"The approval for that loan went to the National Assembly, so everybody is aware of it. It's for refinancing of expensive debts, financing of infrastructure, as well as budgets," he said.

The minister added that the government did not consider each drawdown from the facility a separate financing arrangement requiring a fresh public announcement.

"We don't want to start making press releases each time we do a drawdown. It is not different from any other loan," he added.

Oyedele explained that the financing package was deliberately structured to allow Nigeria access the funds in tranches, rather than drawing the full $5 billion immediately.

According to him, the arrangement is intended to minimise borrowing costs by ensuring the government pays interest only on funds that have actually been accessed.

"The loan is meant to be a drawdown in tranches, and one of the advantages of that is, if you need $5 billion and you take everything at once, you start paying interest, even though you're not spending all of it now.

"So, this has been structured in a way that makes us even more efficient in the cost of borrowing by taking what we need part time," he said.

The minister said the phased financing approach aligns with the Federal Government's broader debt management strategy aimed at lowering financing costs while providing resources for priority national projects.

Last week, Bloomberg reported that Nigeria had accessed approximately $1.5 billion through a Total Return Swap with First Abu Dhabi Bank, describing it as the first utilisation of the broader $5 billion financing arrangement.

Oyedele's remarks provide the government's first official confirmation of that drawdown.

The financing package is expected to support the government's efforts to refinance high-cost obligations, fund strategic infrastructure projects and bridge financing gaps in the implementation of the national budget while seeking to manage borrowing costs more efficiently.