Afreximbank leads $155mn funding for Djibouti projects

African Export-Import Bank (Afreximbank) 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 the country’s Damerjog Industrial Development Free Trade Zone.

The deal, announced after a meeting between Afreximbank President Benedict Oramah and Omar Guelleh, President of Djibouti, on the sidelines of the ongoing summit of heads of states of the African Union, is part of a total facility amount 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 (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 150,000m³ first storage depot/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 a 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.

The facility is also providing support and capacity to SOMAGEC, a Moroccan construction company 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," says Oramah. "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. Afreximbank is very proud to contribute to such a crucial project for Djibouti and the wider region.

“We are equally proud that the project is being implemented by Moroccan EPC contractor SOMAGEC, a testimony to Afreximbank’s support to African contractors undertaking large infrastructure projects on the continent. Our intra-African trade agenda will continue to emphasise support to African contractors to enable them win and execute such major infrastructure projects across the continent."

Aboubaker Hadi Omar, Chairman, GHIH adds: “We are very proud of our collaboration with Afreximbank, a dynamic African multilateral and transaction driven institution, and the continuous valuable technical support of the EPC SOMAGEC. 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 whilst developing a core economic belt with Ethiopia and ultimately an industrial base for East and Central Africa.”

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 with a portfolio that includes companies in shipping, bunkering, management of free zones, storage, road transport and port security.