The African Development Bank has approved a US$30mn loan to a Nigerian pulp and paper mill which makes newsprint.

The Oku Iboku Pulp and Paper Mill will use the loan to upgrade the entire operation, which supplies newsprint for papers throughout Nigeria. The project will be sponsored by Negris Group, an engineering company, whose main assets consist of pulp and paper mills, a wood concession, and a gas-fired power plant.

The total cost of the project will be around US$200mn and the projects will be financed through a 60:40 debt to equity ratio. The debt will be sourced from foreign direct investment and Nigerian commercial banks.

Oku Iboku is set to create savings on newsprint paper imports to Nigeria and to create tax revenues to both state and federal governments. The project is also slated to develop pulp and paper technological skills through a planned transfer of specialized skills and development of links with small and medium-sized enterprises.

Oku Iboku was established as a state-owned company that was shut down in the 1990s and acquired by Negris following a privatisation process in 2008.