Dar es Salaam — Kibaran Resources Limited has reported that it has obtained in-principle approval from the government for its proposed Epanko debt financing arrangements, enabling KfW IPEX-Bank to progress the Untied Loan Guarantee ("UFK") submission for the German government Inter-ministerial Committee.
The statement issued by the company yesterday said processes for arranging the project financing and related UFK cover application to the German government have commenced and may take several months. "Securing approval for the Untied Loan Guarantee is a critical milestone in the Epanko financing process," the statement said.
The developments have resulted in the appointment of KfW IPEX-Bank to arrange senior debt funding for the Epanko Graphite Project in Tanzania.
Last week, the company and KfW IPEX-Bank jointly presented the Epanko debt financing Term Sheet and structuring solutions for recent legislative changes to key Government stakeholders. In principle, approval was received from Ministry for Minerals and the Bank of Tanzania to proceed to finalise debt financing arrangements as presented so that construction of the Project can commence as soon as possible.
The presentations included proposed arrangements relating to the Government's 16 per cent non-dilutable free-carried interest, local content requirements, use of Tanzanian and international banks and bank accounts, logistics and warehousing protocols and compliance reporting.
All parties to the discussions have made a significant effort over the last 18 months to structure Epanko Project debt financing arrangements which incorporate the requirements of Tanzania's new mineral legislation.
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It will also determining how to preserve appropriate credit protections for KfW IPEX-Bank and other senior lenders.
The project is forecast to make a significant, long term contribution to Tanzania.
During the first twenty years, the project is projected to directly contribute over one billion dollars to the Tanzanian economy through procurement, employment, royalties, taxes and dividends.