Addax closes Africa bioenergy first

Addax closes Africa bioenergy first

Addax Bioenergy has closed a €267mn project finance deal with a group of international banks for its bioenergy project − the first of its kind to close in Africa.

The loan was provided by the African Development Bank (AfDB), Emerging Africa Infrastructure Fund (EAIF), Netherlands Development Finance Company (FMO), DEG, the South African Industrial Development Corporation (IDC), the Belgian Investment Company for Developing Countries (BIO) and the ICF.

FMO and the EAIF acted as co-lead arrangers for the debt financing, while Sweden’s development finance institution Swedfund and FMO joined as equity partners.

The project covers 14,000 hectares of mostly unused land near Makeni, in Sierra Leone and includes the development of a Greenfield sugarcane plantation, the construction of an ethanol refinery and a biomass fuelled power plant.

The power plant will provide renewable electricity for the ethanol refinery and will supply energy for approximately 20% of Sierra Leone’s national grid, developing and diversifying the country's energy base. Production of the ethanol refinery and power plant is expected to begin by the end of 2013. The project now employs over 700 people and will create over 2000 jobs once fully operational.

"Addax Bioenergy has done excellent work managing this project, FMO's largest in Sierra Leone so far," says Jurgen Rigterink, chief investment officer of FMO. "The support of the population in and around the area has been very strong; a clear vote of confidence for the project, which benefits all parties concerned and is set to become a model for sustainable investment in Africa."

Tony Lea, chairman of EAIF adds: “EAIF believes the project may pave the way for further investment in Sierra Leone and is an example of the success of the country in attracting foreign investment after putting its period of civil unrest well behind it. The project is the largest single investment in the country outside the mining sector in the last decade. It will help diversify the economy and create a new agricultural skill set and industry in a country with significant agriculture potential.”

Addax Bioenergy is a subsidiary of energy group companies, Addaz and Oryx Group.