The East African country of Eritrea has become the 24th member state to join the Africa Finance Corporation.
This decision was ratified by His Excellency, Isaias Afwerki, President of Eritrea, on 6 November 2019.
Eritrea has experienced stable growth; driven by increased investment in the mining and extractive sectors, with an expectation to deliver an average annual GDP growth rate of circa 4-5% between 2019 and 2024. The country’s economic growth strategy highlights a focus on scaling up infrastructure investments, specifically water and energy, to promote agricultural and industrial transformation. Additionally, the government is committed to improving the mining sector through a natural resource planning strategy.
AFC, in line with its mandate, has committed to provide financing to the Colluli Mining Share Company for the development and construction of the Colluli potash project in the Danakil Depression region of Eritrea.
AFC has agreed to make a US$50 million strategic equity investment in Danakali as part of the overall funding package for development and construction of the Colluli sulphate of potash project. Further, AFC and African Export Import Bank (Afreximbank) have obtained formal credit approval to provide the Colluli Mining Share Company (CMSC) with US$200 million in senior debt finance.
The AFC believes that the successful execution of this project will make significant contributions to exports, employment, agricultural productivity, and overall social and economic development of the country.
“It is my pleasure to welcome Eritrea as a member state of AFC. The government’s efforts at prioritising infrastructure investments bodes well for the country and we are committed to supporting Eritrea’s economic development programmes,” says AFC President and CEO, Samaila Zubairu.
As its 24th member state, Eritrea stands to benefit from AFC’s significant project development expertise and extensive partner network, which includes lenders, investors, project sponsors, project development companies and institutions.
With the growing in-country focus on developing mining, energy and agricultural industries, investment in Eritrea will boost further economic growth and support the country’s Sustainable Development Agenda to which the construction of Colluli is set to contribute significantly.
"We are pleased that Eritrea has been confirmed as an AFC member state. It represents a strong endorsement from the Eritrean Government for of one of CMSC's key funding partners and exhibits AFC's aspirations for further mining and infrastructure investment in Eritrea. Eritrea is open for business," says Danakali CEO Niels Wage.