World Bank Group member Miga has issued US$12.83mn in additional coverage for the Aarti Steel Nigeria (ASNL) project in Nigeria. The additional coverage is for US$13.5mn in new non-shareholder loans to the project enterprise from the State Bank of India. The coverage is against the risks of expropriation, transfer restriction, and war and civil disturbance.
Miga issued guarantees of US$11.4mn to support the project in 2007. The additional coverage of US$12.83mn is supporting an expansion of an existing steel galvanising facility located in Otta, in Nigeria’s Ogun State.
ASNL has constructed a greenfield manufacturing plant for steel galvanising in Ogun State. This facility has a manufacturing capacity of 50,000 tonnes a year, and produces galvanised steel coils, galvanised plain steel sheets, and galvanised corrugated (roofing) steel sheets.
The expansion entails an increase in the manufacturing capacity to 100,000 tonnes a year by setting up an additional galvanising line. The increased capacity of the plant will allow ASNL to meet the growing demand for processed steel goods in Nigeria and neighbouring countries. The expansion will deploy the latest state-of-the-art and environmentally-friendly technology. When the facility is fully online, it is expected to be the largest local manufacturer.
This project is consistent with Nigeria’s strategy to develop the non-oil private sector, as well as with the World Bank Group’s country partnership strategy, which identifies increased foreign direct investment in the non-oil private sector as a critical element of the country’s reform efforts. The project also meets Miga’s priorities of supporting south-south investments and investments in Sub-Saharan Africa.
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