Tanzanian lender, CRDB Bank Plc is betting big on mining segment and sees fresh demand for working capital and term loans as it awaits approval to lend local firm in the coming months.
CRDB Bank bets big on mining loan uptick
The Bank says it seeks to provide $40 million to Tanzania graphite mining firm, Black Rock to facilitate working capital and cost overrun. It will provide $20 million ancillary debt facility as working capital and another $20 million for cost overrun facility.
John de Vries, Chief Executive Officer for Black Rock says that the CRDB Bank Plc credit will be used for Mahenge graphite project.
Graphite firm has also secured $113million from another two lenders for the same project
According to Mr. Vries the graphite firm has also secured $113million from another two lenders for the same project. The other two lenders include $59.6m from Development Bank of Southern Africa (DBSA) and $53.4m from the Industrial Development Corporation of South Africa (IDC).
“The loan terms remain subject to documentation of final agreements, but the loan tenor is expected to be seven years and the interest rate will be based on the Secured Overnight Financing Rate (SOFR) plus a margin,” Mr. Vries said.
According to Black Rock, several other Tanzanian lenders have also expressed interest in participating in these facilities but are yet to receive credit approval and discussions are ongoing.
Steuart McIntyre, General Manager Corporate Development for Black Rock says that such facilities are expected to contain terms and conditions usual for facilities of this type.
According to Steuart, there is no guarantee of the conditions potential lenders may seek to impose, or that facility agreements will ultimately be entered into.
“Funding for the Project to reach production will require both debt and equity,” he said.
The funding of Mahenge graphite project requires both debt and equity to reach production stage.
The firm has already signed an MOU with its Strategic Alliance Partner, POSCO International Corporation (POSCO) for a potential cornerstone equity position in Black Rock of up to $40m and final approvals for this investment are expected near term.
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