Through this programme, the Bank provides limited recourse financing in support of export projects, including mining, manufacturing, and related projects; and infrastructure projects that facilitate exports or that generate traded infrastructure services, such as power, ports, telecoms, etc.
- Eligible Entities Promoting Projects in Africa; and
- Eligible Entities Promoting Projects outside Africa provided that African content in the procurement for such a Project is at least 60%. African content is defined as the sum of rent, interest, wages, salary and profits retained inside Africa.
Maximum tenor of advances under this facility is 7 years.
Linked to the Libor. Spread is determined by obligor, transaction and country risks as well as the tenor of the loan.
The Bank also operates certain procurement rules, key aspects of which include:
- The procurement of Second Hand or Used Equipment is not encouraged;
- Procurement procedure must be conducted in a manner that involves competitive bids and multiple quotes;
- Cash disbursements are not made to parties other than suppliers;
- Additional funding requirements are to be warehoused with Afreximbank or participating banks. Alternatively, project promoters should show evidence that arrangements to meet additional funding requirements are in place;
- Down-payments must be supported with acceptable performance bonds from suppliers;
- Raw material and critical input plan must be provided;
- Promoters or their Managers to show evidence of considerable previous experience in developing and managing project type;
- All corporate and Governmental approvals are to be in place; and
- Suitable suppliers’ warranty must protect Bank and promoter against deviations of equipment from order.
Eligible projects under the Programme include:
- Large manufacturing projects;
- Infrastructure projects, such as pipelines, power, telecoms, ports, etc.;
- Mining projects; and
- Tourism projects, such as hotels, resorts, airports, etc.
The distinguishing feature is that the promoters must be experienced entities with good market knowledge and ability to successfully run the projects or where the promoters are not experienced, they will be required to enter into operating arrangements with reputable entities. Under this Programme, the Bank also provides Bridge Loans to projects in cases where delays occur in disbursement of funds from credible multilateral lenders or commercial banks but where all lending conditions had been met and security in place. This is intended to reduce the cost a delay in loan disbursement may add to the beneficiary project.
Appropriate Loan and Guarantee Agreements, Sales Contract, Assignment Deed, Project Contracts, Support Documents, Security Documents, and Expert Opinions, etc.