Djibouti: Afreximbank Leads $155 Million Strategic Facility for Ports and Free Zone Authority

The African Export-Import Bank (Afreximbank) has announced the disbursement of a $120 million financing facility to Great Horn Investment Holding (GHIH) for the implementation of a series of development projects in the Damerjog Industrial Development Free Trade Zone of Djibouti.

The agreement, which was announced following a meeting between Afreximbank President Prof. Benedict Oramah and Djibouti President Omar Guelleh on the margins of the ongoing African Union Summit of Heads of State, is part of a $155 million facility for work on the free trade zone. The remaining $35 million is provided by Djibouti’s Banque pour le Commerce et l’Industrie de la Mer Rouge (BCIMR). The facility’s proceeds will be used for the completion of the Damerjog Oil Jetty, which will provide marine connectivity to the free trade zone, and for the construction of a 150,000m3 first storage depot/oil tank farm, in addition to other project-related expenses.

The transaction, which is Afreximbank’s first in Djibouti in collaboration with GHIH and the government, aims to support the development of a trade-enabling infrastructure to help Djibouti realise its goal of becoming a regional trans-shipment and logistics centre. It will also promote intra-African trade, given that Djibouti’s economy is primarily dependent on the provision of marine services to Ethiopia and Somalia, by providing them with a port for ocean-borne goods.

Significantly, the facility provides support and capacity to Afreximbank’s intra-African trade champion, the Moroccan construction company SOMAGEC. Under the Intra-African Trade Champion programme, Afreximbank facilitates African firms in executing infrastructure projects in other African nations and in competing with international firms on a global scale.

Prof. Oramah commented on the agreement, stating, “The significance of this historic agreement lies in its potential to boost the industrial capacity of Djibouti and its neighbours by ensuring the implementation of critical trade-enabling infrastructure to support bulk handling of liquid products. The addition of a jetty and bulk port to the Djibouti Free Trade Zone will significantly enhance Djibouti’s function as a trans-shipment hub for landlocked countries in the region. Afreximbank is ecstatic to contribute to such an important initiative for Djibouti and the surrounding region.”

“We are equally proud that the project is being carried out by Moroccan EPC contractor SOMAGEC, a demonstration of Afreximbank’s support for African contractors undertaking significant infrastructure projects on the continent. Our intra-African trade agenda will continue to emphasise support for African contractors to enable them to secure and carry out such massive infrastructure projects across the continent, he added.

In the past six years, Afreximbank has been a major contributor to the engineering, procurement, and construction (EPC) market in Africa through its $13 billion in financing and facilitation interventions. This includes the financing of over $7 billion in EPC-related transactions and the issuance of over $6 billion in trade instruments to support and facilitate the awarding of contracts to African contractors.

Commenting on the transaction, GHIH’s Chairman Aboubaker Hadi Omar stated, “We are extremely proud of our collaboration with Afreximbank, a dynamic African multilateral and transaction-driven institution, and the continuous valuable technical support of the EPC SOMAGEC.” In accordance with our multi-year infrastructure investment strategy, which aims to position our country as a logistical and commercial hub for the sub-region, we are meeting this growing demand by delivering the infrastructure required to support and enhance the economic and efficient movement of petroleum products in the region, whilst developing a core economic belt with Ethiopia and, ultimately, an industrial base for East and Central Africa.

Moreover, it demonstrates that our president’s vision “Djibouti 2035″ is being realised, thereby transforming Djibouti into a regional logistic centre,” he added.

GHIH, a Djiboutian government-owned investment holding company, is responsible for logistics and transportation infrastructure. It possesses interests in approximately 18 of the largest state-owned companies in the country, with a portfolio that includes shipping, bunkering, free zone management, storage, road transport, and port security companies.