The African Export-Import Bank (Afreximbank) in Nairobi has announced the disbursement of a $120-million financing facility to Djibouti’s Great Horn Investment Holding (GHIH) for the execution of a series of development projects in Djibouti’s Damerjog Industrial Development Free Trade Zone.
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 Djibouti, with a portfolio that includes companies in shipping, bunkering, management of free zones, storage, road transport and port security.
The deal, which was announced on July 17 after a meeting between Afreximbank president Professor Benedict Oramah and Djibouti President Omar Guelleh on the sidelines of the ongoing Summit of Heads of State of the African Union, is part of a total facility of $155-million for work on the free trade zone.
The remaining $35-million is being financed through Banque pour le Commerce et l'Industrie Mer Rouge, or BCIMR, of Djibouti. Proceeds of the facility will be used for the completion of the Damerjog Oil Jetty, which will provide marine connectivity to the free trade zone, and for the construction of a 150 000 m³ first storage depot and oil tank farm, as well as for other costs related to the projects.
The deal, which is Afreximbank’s first in Djibouti in collaboration with GHIH and the government, is targeted at supporting the development of trade-enabling infrastructure to assist Djibouti in achieving its plan to become a regional trans-shipment and logistics hub.
It will also promote intra-African trade, given that Djibouti’s economy is largely based on the provision of marine services to neighbouring nations Ethiopia and Somalia, by offering them a gateway for ocean-borne freight.
In addition, the facility is providing support and capacity to Moroccan construction company SOMAGEC, which is Afreximbank’s intra-African trade champion. Under the intra-African trade champion programme, Afreximbank supports African companies to execute infrastructure projects in other African countries and assists them to compete globally with international players.
“The crucial contribution of this landmark deal lies in its potential to deliver a boost to the development of the industrial capacity of Djibouti and its neighbours by assuring the implementation of critical trade-enabling infrastructure to support bulk handling of liquid products. 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 neighbouring landlocked countries,” Oramah said.
He added that the intra-African trade agenda would continue to emphasise support to African contractors to enable them to win and execute major infrastructure projects across the continent.
Afreximbank has supported the engineering, procurement and construction (EPC) market in Africa with financing and facilitation interventions totalling $13-billion in the last six years. This includes financing of more than $7-billion worth of EPC-related transactions and issuance of trade instruments worth more than $6-billion to support and facilitate the award of contracts to African contractors.
“In line with our multi-year infrastructure investment strategy aiming to position our country as a logistical and commercial hub for the sub-region, we’re meeting this growing demand by delivering the infrastructure necessary to support and enhance the economic and efficient movement of petroleum products in the region while developing a core economic belt with Ethiopia and ultimately an industrial base for East and Central Africa,” GHIH chairperson Aboubaker Hadi Omar said.