The African Export-Import Bank (Afreximbank) has provided almost €55mn in loans to three local manufacturing firms.

The finance will be used for equipment procurement and to expand food processing capabilities. It is part of the bank’s initiative to move Africa away from being an exporter of raw produce alone.

The first loan of €25mn will be made to Sonoco SA Guinea, and will be used to finance the import of a flour mill, which will alleviate its need to import flour. The loan has a tenor of five years and is secured by the mill itself, as well as proceeds from flour sales. United Bank of Africa, Guinea, is the local administrative agent, guarantor and letter of credit issuing bank.

The second loan, made to Condicaf of Côte d’Ivoire, is worth €18.9mn and will be used to refinance existing debt and to purchase a cocoa processing plant and beans. Jean-Louis Ekra, Afreximbank’s president, confirms to GTR that the loan has two tranches: the first will amortise in five years, and the second, to be used for working capital, will mature in one year, but is renewable. The finance is secured by cocoa exports. Banque Nationale d’Investissement Côte d’Ivoire is the local administrative agent and guarantor.

The third loan has been made to Sucso, again of Côte d’Ivoire, and is on the same terms as Condicaf’s package. Ecobank Côte d’Ivoire is involved as the local administrative agent and guarantor.

Ekra tells GTR that while Afreximbank has increased direct lending, it will continue to encourage commercial banks to be involved in lending wherever possible. He says: “Local commercial banks are pivotal to our model of financing. The bank’s approach had always been to complement local commercial banks even where we fund corporates directly.

“In effect, while we are growing our direct lending activities, it remains that some companies do not immediately meet our requirements in terms of size and minimum years of operation. Usually, in situation like this, the bank would involve a local commercial bank as the borrower for on-lending to the companies as sub-borrowers.

“In this respect, over 50% of the business we did this year was with commercial banks that we recognise as trade finance intermediaries. These account for a network of over 80 commercial banks across the entire continent.”