AFC arranges €577 million loan for Ivorian Refining Company

07 Jan 2019

Summary

The purpose of the debt facility is to repay historical obligations on crude supply, provide a long-tenured facility and reduce the interest rate on SIR’s debt stock.

Samaila Zubairu, President and CEO, Africa Finance Corporation

The Africa Finance Corporation (AFC) has announced that it has successfully closed €577 million debt financing for Société Ivoirienne de Raffinage (SIR), the Ivorian Refining Company. AFC’s participation was for €192 million, and it served as the Sole Mandated Lead Arranger.

Founded in 1962, SIR has an installed capacity of 3.8 million tonnes per annum of refining capacity and is currently the largest and most sophisticated operational refinery in West Africa.

According to a statement released by the AFC on Monday, the purpose of the debt facility is to repay historical obligations on crude supply, provide a long-tenured facility and reduce the interest rate on SIR’s debt stock. The debt facility comprises of a Euro tranche with a nine-year maturity and a West African franc tranche with a seven-year maturity.

“The transaction proves that complex funding programmes that provide long-term low-cost capital can be achieved in Africa,” said Samaila Zubairu, President and CEO of the AFC. “Not only is SIR the leading company in Côte d’Ivoire in terms of total balance sheet and turnover, but it is also one of the country’s largest employers. It is a training outlet for high-skilled employment, thereby making it an important regional player when it comes to building capacity across the continent.”

The long-term funding, according to the statement, will free up resources to enable SIR to make the much-needed investments in its current operations and upgrade its facility and production processes to align with current environmental emissions standards and expand its business.

Other banks that participated in the funding alongside the AFC include the Deutsche Bank, ICBC Standard Bank, United Bank for Africa, NSIA Bank and Bridge Bank. Norton Rose Fullbright and Billé-Aka, Brizoua-Bi & Associés were the counsels for the lenders.

Thomas Camara, Director General of SIR, said, “The management of SIR is pleased with the successful outcome of this transaction which has enabled the conclusion of a greatly needed capital programme which will enhance the operations of SIR.”

The AFC, a leading infrastructure development finance institution in Africa, noted that the refinancing facility is integral to the International Monetary Fund’s financial programme for Côte d’Ivoire as SIR is considered to be a strategic asset for the country.

“Through this transaction, AFC has mobilised global sources toward resolving the deficit in investments in infrastructure and industrial assets on the continent,” said Tariye Gbadegesin, Head of Heavy Industries at the AFC.


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