Afreximbank grants Djibouti loan worth $120M to help drive the country’s economy
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Business Staff Reporter Garowe Online
- Posted On 27-07-2023, 06:43PM
NAIROBI - Djibouti has received a $120 million loan from the African Export-Import Bank (Afreximbank) in a deal that is targeting projects that will accelerate the country’s economic growth.
This loan facility will go to Djibouti’s Great Horn Investment Holding (GHIH) to execute projects in the country’s Damerjog Industrial Development Free Trade Zone, which is part of a total facility amount of $155 million. The remaining $35 million will be financed through Banque pour le Commerce et l’Industrie Mer Rouge of Djibouti.
GHIH, a state-owned investment holding vehicle of the Government of Djibouti, is responsible for logistics and transportation infrastructure. It holds interest in about 18 of the largest state-owned companies in the country. Its portfolio includes companies in shipping, bunkering, management of free zones, storage, road transport, and port security.
The loan will also be used for the completion of the Damerjog Oil Jetty. This investment will provide marine connectivity to the free trade zone. Further, Djibouti will use the money for the construction of a 150,000m³ first storage depot/oil tank farm, and for other costs related to the projects.
“The establishment of a jetty and bulk port in the Djibouti Free Trade Zone will add significant value to Djibouti’s role as a trans-shipment hub for neighboring landlocked countries. Afreximbank is very proud to contribute to such a crucial project,” Afreximbank President Benedict Oramah said.
The deal, which is Afreximbank’s first in Djibouti, is targeting the development of a trade-enabling infrastructure, helping the country become a regional trans-shipment and logistics hub.
It will also promote intra-African trade in the region. Djibouti’s economy is largely based on the provision of marine services to neighboring nations Ethiopia and Somalia. The French-speaking country offers Ethiopia and Somalia a gateway for ocean-borne freight.
Afrexim’s loan will also provide support and capacity to SOMAGEC, a Moroccan construction company, which is Afreximbank’s Intra-African Trade Champion.
Under the Intra-African Trade Champion program, Afreximbank supports African companies in executing infrastructure projects across the continent. Afreximbank also assists them in competing globally with other international players.
Oramah highlighted the crucial contribution of this landmark deal. It has the potential to boost Djibouti’s industrial capacity and that of its neighbors. The deal ensures the implementation of trade-enabling infrastructure for the bulk handling of liquid products.
Afreximbank is a key supporter of the engineering, procurement, and construction (EPC) market in Africa with financing totaling $13 billion in the last six years. This includes financing of over $7 billion worth of EPC-related transactions and issuance of trade instruments worth $6 billion to support the award of contracts to African contractors.
Afreximbank President Benedict Oramah expressed pride in the project’s implementation by Moroccan EPC contractor SOMAGEC. He sees it as a testament to Afreximbank’s support for African contractors on the continent. The intra-African trade agenda will focus on supporting African contractors to win and execute major infrastructure projects across Africa.
GHIH’s Chairman, Aboubaker Hadi Omar, commented on the transaction. He stated that their multi-year infrastructure investment strategy aims to position Djibouti as a regional logistical and commercial hub.
This loan facility will go to Djibouti’s Great Horn Investment Holding (GHIH) to execute projects in the country’s Damerjog Industrial Development Free Trade Zone, which is part of a total facility amount of $155 million. The remaining $35 million will be financed through Banque pour le Commerce et l’Industrie Mer Rouge of Djibouti.
GHIH, a state-owned investment holding vehicle of the Government of Djibouti, is responsible for logistics and transportation infrastructure. It holds interest in about 18 of the largest state-owned companies in the country. Its portfolio includes companies in shipping, bunkering, management of free zones, storage, road transport, and port security.
The loan will also be used for the completion of the Damerjog Oil Jetty. This investment will provide marine connectivity to the free trade zone. Further, Djibouti will use the money for the construction of a 150,000m³ first storage depot/oil tank farm, and for other costs related to the projects.
“The establishment of a jetty and bulk port in the Djibouti Free Trade Zone will add significant value to Djibouti’s role as a trans-shipment hub for neighboring landlocked countries. Afreximbank is very proud to contribute to such a crucial project,” Afreximbank President Benedict Oramah said.
The deal, which is Afreximbank’s first in Djibouti, is targeting the development of a trade-enabling infrastructure, helping the country become a regional trans-shipment and logistics hub.
It will also promote intra-African trade in the region. Djibouti’s economy is largely based on the provision of marine services to neighboring nations Ethiopia and Somalia. The French-speaking country offers Ethiopia and Somalia a gateway for ocean-borne freight.
Afrexim’s loan will also provide support and capacity to SOMAGEC, a Moroccan construction company, which is Afreximbank’s Intra-African Trade Champion.
Under the Intra-African Trade Champion program, Afreximbank supports African companies in executing infrastructure projects across the continent. Afreximbank also assists them in competing globally with other international players.
Oramah highlighted the crucial contribution of this landmark deal. It has the potential to boost Djibouti’s industrial capacity and that of its neighbors. The deal ensures the implementation of trade-enabling infrastructure for the bulk handling of liquid products.
Afreximbank is a key supporter of the engineering, procurement, and construction (EPC) market in Africa with financing totaling $13 billion in the last six years. This includes financing of over $7 billion worth of EPC-related transactions and issuance of trade instruments worth $6 billion to support the award of contracts to African contractors.
Afreximbank President Benedict Oramah expressed pride in the project’s implementation by Moroccan EPC contractor SOMAGEC. He sees it as a testament to Afreximbank’s support for African contractors on the continent. The intra-African trade agenda will focus on supporting African contractors to win and execute major infrastructure projects across Africa.
GHIH’s Chairman, Aboubaker Hadi Omar, commented on the transaction. He stated that their multi-year infrastructure investment strategy aims to position Djibouti as a regional logistical and commercial hub.
The goal is to meet the growing demand for petroleum products in the area. They are delivering the necessary infrastructure to support and enhance economic and efficient movement. Moreover, this investment will help develop a core economic belt with Ethiopia. It will also create an industrial base for East and Central Africa.
GAROWE ONLINE
