Editor's Note
This editor’s note highlights the key facts and market implications behind “Afreximbank Signs Project Preparation Facility A”, with emphasis on sourcing, product fit, fabrication, logistics, or buyer impact.
Mr. Adebisi Abidemi Adebutu, Chairman of R28 Holdings Group, and Mrs. Kanayo Awani, Executive Vice President of Afreximbank for Intra-African Trade and Export Development. The African Export-Import Bank (Afreximbank) has signed a Project Preparation Facility agreement with Veenocks Limited to finance the development of Veenocks' porcelain tile manufacturing plant located in Sagamu, Ogun State, Nigeria. Mrs. Kanayo Awani, Executive Vice President of Afreximbank for Intra-African Trade and Export Development, signed the facility agreement on behalf of Afreximbank, while Mr. Adebisi Abidemi Adebutu, ultimate beneficial owner of Veenocks Limited, signed the document on behalf of his company. The project is expected to harness and add value to Nigeria's underutilized natural resources by using clay to produce porcelain tiles for domestic and international markets and deploy proven technology to enable the country to exploit its natural resources on a large scale. In addition to creating over 700 jobs during its operational period, the project is expected to generate an estimated US$11.4 billion in exports. The plant, which will be operated as a state-of-the-art, company-owned facility with an annual production capacity of 6.6 million square meters of floor and wall tiles, is scheduled to be commissioned at an estimated investment cost of US$117 million. Under the terms of the facility agreement, the project preparation mechanism will be deployed during the pre-investment phase to reduce project risks and make it rapidly bankable, with the early intervention sending a strong signal to the market regarding Afreximbank's commitment to the project. Furthermore, Afreximbank will be appointed as the mandated lead arranger and will lead the syndication of the fundraising, with the possibility of incorporating credit enhancements if necessary. According to Mrs. Awani, the facility agreement reflected Afreximbank's commitment to advancing impactful projects in Nigeria and beyond, as well as its determination to leverage its diversified product range to offer end-to-end solutions throughout the project finance value chain.
She added that the holistic approach reflected the Bank's comparative advantages in helping its member countries implement projects efficiently and effectively and its support for indigenous African investors to establish cutting-edge manufacturing facilities. Tile demand in Nigeria was estimated at 210 million square meters in 2023, with local production at 137 million square meters. Demand is projected to reach 270 million square meters by 2027.
“We are delighted to welcome Afreximbank as a key partner in Veenocks’ march towards sustainable growth. Once fully operational, our state-of-the-art plants will set a new benchmark for world-class facilities in Africa and demonstrate our commitment to excellence and innovation. This strategic partnership with Afreximbank marks a significant milestone in Veenocks’ expansion plans. It will enable the company to leverage the Bank’s expertise and resources to drive growth and development in the region. Through this collaboration, Veenocks is poised to make a significant impact on the industry, fostering economic growth and creating opportunities for communities across Africa.”
Mr. Adebisi Abidemi Adebutu, Chairman of R28 Holdings Group, the parent company of Veenocks, said.
Source: Read the original article | Published: August 15, 2024