Ethiopia's Steel Giant Abyssinia Eyes $20 Million IFC Loan for East African Expansion, Green Initiatives

30 October 2024
Addis Standard (Addis Ababa)

Addis Abeba — The Board of Directors of the International Finance Corporation (IFC) is set to vote on a financing package of up to $20 million in secured loans for Abyssinia Group of Industries (AGI), a leading steel manufacturer in Ethiopia and East Africa.

According to the IFC, which is a member of the World Bank Group, the vote is scheduled for 30 November, 2024.

The loan aims to support AGI's ambitious expansion and sustainability initiatives, including capacity growth, backward integration, decarbonization, and working capital needs.

Founded in 2003, AGI operates in Ethiopia, Kenya, and Uganda, holding a prominent position as Ethiopia's largest steel producer and Kenya's second-largest, with a production capacity of 660,000 metric tons annually.

AGI's diverse steel product lineup serves the construction sector and includes reinforced bars, steel angles, pipes, tubes, plates, wires, wire mesh, barbed wire, and nails.

The financing package will drive AGI's expansion in Ethiopia with a block rolling mill, a 25-ton induction melting furnace, a ladle refining furnace, as well as wire drawing lines and nail machines.

In Uganda, funds will enhance operational efficiency and enable the installation of an 11 MW waste heat recovery (WHR) power plant to support decarbonization.

Additionally, the project includes plans to develop a 5 MW solar power plant in Kenya.

The IFC provides financing to projects and companies through direct loans, typically with terms ranging from seven to 12 years.

To be eligible for IFC funding, a project must meet several criteria, including being located in a developing country that is a member of the IFC.

The IFC has a history of financing projects in Ethiopia. This includes an equity investment, a loan, and guarantees to support the construction and operation of Safaricom Ethiopia's telecommunications network throughout the country.

In June 2023, the IFC, in partnership with the Multilateral Investment Guarantee Agency (MIGA), announced a $157.4 million equity investment in Global Partnership for Ethiopia BV (GPE) and a $100 million direct loan to its wholly-owned subsidiary, Safaricom Ethiopia.

Read the original article on Addis Standard.

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