An Africa Business Community
Ecobank Capital, the investment banking arm of Ecobank, the leading pan-African bank, announces that it has successfully raised, in FCFA and Euro equivalent, the sum of USD 228 million required to close the first tranche of a loan syndication on behalf of Olam Palm Gabon (“OPG”).
The facility comprises a USD 20 million 10-year FCFA tranche and a USD 208 million 7-year Euro and FCFA tranche, extendable to 12 years. The second tranche of the syndicated loan is likely to be placed with international development finance institutions at a later date. Ecobank Capital acted as the mandated lead arranger, working with two co-arranging banks, namely, Afreximbank and BGFI Bank Gabon.
The Central African Development Bank participated as a lender. The closing ceremony was held in Paris on the 12th July.
OPG is a 70:30 joint venture between Olam International (‘Olam’), a leading global integrated supply chain manager and processor of agricultural products, and the Republic of Gabon. The proceeds will be used to finance the establishment of a 50,000-hectare palm oil plantation and crushing mill in Gabon. Once at full capacity, the project will make Gabon one of West Africa’s leading palm oil producers, potentially overtaking Côte d’Ivoire as the region’s largest palm oil exporter.
Thanking all the syndicate partners for their confidence in the project, Mr. Gagan Gupta, Olam International’s representative in Gabon, observed: "This project represents an essential part of Olam’s partnership with the Republic of Gabon, which will contribute to the State’s emerging policy of sustainable development. We will be implementing international best practices throughout the entire supply chain by adopting the Roundtable on Sustainable Palm Oil (RSPO) principles."
Mr. Jean-Louis Ekra, the President of Afreximbank, a Co-Arranger and the largest contributor to the transaction, remarked: “Afreximbank is proud to be associated with this groundbreaking project as it reflects our core mandate to develop, facilitate and stimulate intra- and extra-African trade. It also underscores Africa’s need to develop similar agro-processing projects that are robustly structured around adding value to the Continent’s abundant primary raw materials and commodities.”
Mr. Brice Laccruche Alihanga, Managing Director of BGFI Bank Gabon, added: “Our role as Co-Arranger of this financing confirms our status as CEMAC’s leading bank and highlights our willingness to support projects that help to diversify the Gabonese economy.”
Welcoming the agreement, Mr Michael Adande, President of the Central African States Development Bank (‘BDEAC’), said: "This project will have a real socio-economic impact through the creation of thousands of jobs, both in the investment phase and the operational phase, and, ultimately, an improvement in Gabon’s trade balance and capital account, as well as increasing foreign reserves due to rising dollar-denominated exports of palm oil.”
Ehouman Kassi, Ecobank’s Head of Investment Banking, concluded: “This landmark transaction underscores Ecobank’s capabilities as a Leading Arranger of syndicated loans, working with Africa’s key financial institutions, to provide support vital to Gabon’s non-oil economic growth, especially at a time when the Eurozone crisis is threatening African businesses’ access to international markets.”