First Bank’s Partnership with Kaztec is Perfect – Bashirat Odunewu
In this interview, Odunewu Bashirat, Group Executive, Institutional Banking Group reveals that First Bank is truly in the business of growing businesses in the oil and gas sector. Gladys Johnson reports.
Q; Can you tell us what you saw at the Snake Island?
It was impressive. I know Kaztec is a hundred percent indigenous Nigeria Oil Company. We were given presentations. We did a walk around. And I must say the things we saw were really encouraging that a Nigerian company can be doing such good and technical work. They showed us some of the projects that they have concluded and the work that is ongoing. There is a lot of engineering work and these are things that normally they would have given to foreigners to do.
I think even their customers, Addax being there, they were satisfied. It was a very good visit. It is because we are interested that we went there in the first place. We are looking at how we will support them even more.
Q: First Bank was not into too much oil and gas activities but it is beginning to come out now. What informed your interest?
I will say that is not true; we are actually at the forefront of oil and gas activities. Even as at today, we are one of the top two in oil and gas. Maybe we don’t use to make too much noise about it. Our customers know and I mean we are always the first point of contact if somebody wants to do something in that area. They know we have a lot of expertise in it. And sometime we work with our sister company FBN Capital. In fact, there’s hardly any transaction you can talk about in recent time we are not part of.
Q: Why is it difficult for smaller companies to access loans from your bank?
I don’t think say so. But first of all what the Nigerian company has to know is that it has to be competent, it has to be able to prove to us that they have already invested some of their own equity because we have what we call being a bankable project. Sometimes somebody will
wake up and say I want to build a yard like what they are doing in Kaztec and tell the bank come and finance it. The idea is that you can start with some things that you can manage by yourself. And then when the bank sees what you are doing, and they can see where you are
going, then we will work along with you. A lot of people do not want to put in anything and they will just say the bank should do it. You need to show your own commitment. Sometimes somebody will say that I want to do it by myself. You can have a group coming together,
you start with what you can with your resources and once the bank can see that it is moving well, they join you. I think for Kaztec, we work with them in some other areas like, for example, on the DISCO side in Enugu we are their banker. So, we have a relationship with the company and we know what else they are doing. As bankers it is our business to know what is going on. That is part of our job. You need to know where the next transaction is going on. That is normal for us.
Q: Now that what you have seen is encouraging, what level of support are we looking at?
I think we will say good level of support. There are some things we can’t really be saying right now because we know the project they are talking about. I’m sure the MD would want to give you some information about the project if you need it. But I know that we are talking about
billions of dollars. So, along the line there is a certain percentage the bank will also do out of it.
Q:What level of support or investment did your bank give to the oil and gas sub sector last year?
Lekan Adelekan is my name. I run the energy group. Last year alone we invested in excess of 84.2 billion dollars to oil and gas and this comprises not only the upstream exploration and production companies, but also in midstream companies which is where you will find Kaztec.
Kaztec is one of the three fabricating indigenous companies in Nigeria today and we are happy to say we are very much at the forefront of supporting this company. In terms of investments we are
Q: I know that First Bank also played a very vital role in the privatization of the power sector. How much have you invested in that process?
Enugu Disco is a distribution company. They don’t have anything to do with how power comes. Their own is to distribute. So, if the generating companies and the transmission company don’t bring enough power, there is nothing we can do. But theirs is to show they can and there is no wasting of power. If you use power, you pay for it. That is what a distribution company does. So, for them it is nothing to do with the source of power. We know in those days everything was PHCN in terms of distribution, transmission and generation. But now they have split them into different areas. This Enugu project is handling distribution. Along the line they will be getting more of prepaid meters because that’s what they need for now. But the power generation
is not under their control. They have what they need in terms of credit. They are trying to do more of expansion, especially to get more of meters here. And we are also supporting them along those lines.
Well, it’s a piece meal project. For example, they have different stages. It is something that grows along; we are talking about a ratio whereby we can do some certain portion. And even as a bank, sometimes we invite some of our colleagues. We need to do syndication if it is something we can handle. Because you know for a bank, we have a limit set by the regulators. You can’t go beyond a certain amount with any company. So, that is what will determine our position.
Q:What is the First Bank’s budget for the energy support this year?
Our budget is in trillions. That is the way to put it. In terms of energy sector, for the downstream, I will say we have facilities of over hundred and fifty billion naira to different companies. And
sometimes it goes up because you know that it is something that fluctuates. For upstream, like you said, last year we supported with 1.5 billion dollars, People pay down and take more. And like you said, it’s a circle that keeps evolving.
Q: Would you kindly recap the summation of your visit in the Snake Island and what it means in terms of relationship between Kaztec Engineering and First Bank?
It was an impressive visit because my colleague was there months ago and he had seen how some things have been added and, of course, it’s a busy yard. They do more of fabrication. Addax personnel were there and told us that with about 1.2 billion dollars they will start soon. For First Bank, we were in their office with their chairman, Sir Emeka Ofor, and my MD was there. So, I think, for us, it shows commitment. What we are looking at as we partner with them, of course, with their CFO, we will work out the modalities of the portion we can do.