Deutsche Bank has signed a €225mn eight-year loan with the ministry of finance of Angola to support a road reconstruction project in the country's capital of Luanda.
The loan is being used by Angola's INEA National Roads Institute, part of the ministry of public works, to import goods and services from the Spanish company CCL, part of the Eurofinsa Group.
Deutsche Bank in Madrid acted as sole arranger and agent on the facility. The loan is partially supported by the private insurance market.
It is the largest transaction to date closed within a framework agreement signed in 2003 between the bank and Angola. Initially the loan agreement started with a US$50mn line of credit with no ceiling limit, but the various facilities have increased in size.
The loans have been used to support a variety of projects, including transportation, water and health sectors in Angola, financing supply contracts from various European suppliers.
The loans have been instrumental in helping open up the country to the wider global banking world. Angola’s minister of finance Jose Pedro de Morais comments in an official release:
"These loans were a decisive first step towards a 'normal' relationship with the international finance community. Namely before the agreement with the Paris Club creditors these loans allowed the implementation of critical supply contracts that otherwise would face delays and difficulties with prejudice for the national reconstruction process."
Ingacio Ramiro, head of structured trade and export finance at Deutsche Bank, in Spain adds: “We are proud of this example of using trade finance techniques to help Angola's financial recovery. Certainly, our framework agreement has been a crucial factor in the country’s reconstruction efforts and has helped Angola to develop stronger relationships with the wider international finance community. There’s a way to go, but the country is rapidly moving to emerging market status.”
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