The agency said the local currency financing structure
follows the same format as a conventional buyer credit in sterling or any other
currency.
UKEF added that Nigerians making transactions in the UK
through loan financing in naira from a bank in Nigeria can benefit from the
British government-backed guarantee.
"UK government will now be able to support finance in
naira to Nigerian projects procuring from the UK" the statement read.
The agency said this will enable businesses to manage
foreign exchange risks and, many times, to bargain better terms with local
banks.
"The arrangement shows the kind of value the UK places
on its relationship with Nigeria, said Paul Arkwright, the British high
commissioner to Nigeria.
The high commissioner said that the approval will provide a
firm platform for a significant increase in trade and investment between
Britain and Nigeria.
Ben Ainsley, head of the department for international trade
(DIT), Nigeria, said the agreement is the outcome of the UK trade envoy's visit
to Nigeria in November 2022.
He said the UK is excited to be able to offer Nigerian, as
well as British, businesses the ability to enter trade arrangements that are
financially feasible for both sides.
This development makes Nigeria one of the three West African
countries on UKEF's pre-approved currencies list.
UKEF provides a range of innovative and flexible products,
providing up to 85 percent funding for projects containing a minimum of 20
percent UK Content.
Requests will be assessed on an application basis through
the UK Department for International Trade, Nigeria, and UKEF in London.
Anyone interested is encouraged to contact the UK Department
for International Trade in Nigeria for guidance.