The preferred power contractor, Inglett & Stubbs International (ISI), will use the guarantee to facilitate senior debt funding that will be used to cosntruct the project’s power plant.
ISI will utilise a build own operate transfer (BOOT) model, which diversifies project risk by utilising the experience of proven operators.
Notably, the US$42 million guarantee is separate from the project financing requirements and does not represent an increased debt obligation.
Earlier this week, Danakali received credit approval for a US$200 million senior debt facility from Africa Finance Corporation (AFC) and Afreximbank.
Credit approval is a critical project financing and execution milestone and represents the conclusion of an extensive due diligence process.
Danakali continues to assess a range of options for funding the balance of the capital required to bring Colluli into production.
Today’s US$42 million guarantee from Afreximbank is further comfirmation of their confidence in the project and Eritrea.
Proactive caught up with Danakali back in April 2019 for an update.