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Zenith Bank and the French Development Agency – Agence Française de Développement (AFD) – have signed a $100 million power sector credit facility to support capital expenditure by electricity distribution companies (DISCOs) in Nigeria’s power sector.

Under the agreement, a maximum of $50 million loan can be made available to a DISCO at single digit interest rate for a tenor of between seven and 12 years, with a moratorium of two to three-and-a-half years, depending on the project’s cash flow.

The loan also provides for technical assistance and other advisory services, both to benefiting DISCOs and Zenith Bank, which is the partnering bank.

The AFD facility was signed on Saturday during a bilateral meeting between President Muhammadu Buhari and French President, Francois Hollande, at the Aso Rock Villa, Abuja, according to a Zenith Bank statement released on Monday.

Jim Ovia, the Chairman of Zenith Bank Plc, and Mrs. Laurence Breton-Moyet, AFD’s Chief Operating Officer, signed the loan agreement on behalf of their organizations.

The AFD facility is aimed at reinforcing, rehabilitating, and modernizing the existing electricity distribution networks – the prerequisite for the connection of new customers while ensuring the stability of the grid.

Zenith Bank is one of the largest banks in Nigeria. The bank’s total assets stood at N4.01 trillion as of full-year 2015.

The AFD is a public financial institution and the main implementing agency for France’s official development assistance to developing countries and overseas territories. In 2014, the AFD allocated 8.1 billion euros to finance projects, including 6.35 billion euros in developing countries and 1.55 billion euros for overseas France.