FG Pays $22.5m Charge On $1.5bn UAE Financing Facility

The Federal Government paid $22.5 million in charges on its $1.5 billion Total Return Swap financing from First Abu Dhabi Bank during the second quarter of 2026, according to the latest data from the Debt Management Office (DMO).

The payment was recorded entirely as “other charges”, with the DMO report showing no principal or interest payment on the facility between April and June.

The $22.5 million charge represents about 1.5 per cent of the $1.5 billion Nigeria had drawn from the broader $5 billion financing programme approved with the UAE-based bank.

However, the DMO did not specify what the charge covered, leaving it unclear whether it was related to arrangement, transaction, commitment or other fees associated with the financing structure.

Nigeria secured approval for the financing programme as part of efforts to raise foreign currency for the 2026 budget and manage its debt obligations. Under the arrangement, the government receives dollar financing while providing naira-denominated Federal Government securities as collateral.

The first $1.5 billion drawdown remained outstanding as of June 30, 2026, while another $3.5 billion remains available under the approved programme.

The facility differs from conventional Eurobond borrowing and has attracted attention because of its collateral requirements and exposure to movements in interest rates and financial markets.

The DMO previously clarified that crude oil revenues, airports, ports and other strategic national assets were not pledged as security. Instead, Federal Government securities were used as collateral, with the arrangement allowing collateral of up to 133.3 per cent of the amount drawn.

The development also adds to Nigeria’s financial exposure to First Abu Dhabi Bank. As of June 30, the country owed about $1.87 billion under an existing syndicated facility from the bank, in addition to the $1.5 billion Total Return Swap.