RE: Kefi website Q&A today3 Jan 2024 08:28
A: The credit approval process started years ago and successfully went through its initial stages. Readiness to proceed was preserved (but obviously suspended) during the years of significant internal conflicts in Ethiopia which peaked at the end of 2021 with the end of the Tigray civil war. With the benefit of hindsight, we obviously lost years protecting the project on several levels whilst our risk-mitigants were tenaciously refined as required by our changed environment. We have always highlighted the need to ensure we can proceed safely in terms of protecting our people, our c. $100M historical investment and the c. $400M capital planned to be provided by the syndicate.
As reported, the project finance syndicate lifted the project suspension in mid-2022 and set out its conditions; it reiterated the conditions in mid-2023; the approvals processes stepped up in November with the completion of the updating of all due diligence ready for final approvals; all-stakeholder meetings called in December on the back of the 3 key conditions having finally been satisfied plus all due diligence updated:
- AFC being granted country membership in March, like Lead-Lender TDB;
- Government stepping up security, started in April and reinforced in December;
- Central Bank formalising its exemptions from capital controls, started in May and being completed in October;- All technical and legal due diligence updated;
- Checklist of conditions precedent agreed for launch.
So we are now literally in the midst of final approvals. Having weathered years of challenge, we believe that we understand the syndicate members and their own processes well enough to allow us to prepare for launch of the fully project-financed project. That means we have enterred the community to prepare the individual households for resettlement and legal teams prepare final documentation for executions amongst the multitude of individual counter-parties . There are other tasks in the list of conditions precedent but nothing unusual to such transactions. But all are necessary to provide the risk-managed protection required for the first bankable mining project ever in Ethiopia. Full launch means that all is deemed safe, funds flow, the community gets moved, construction contracts signed and orders placed for equipment. Whilst all parties commit at launch, equity gets used first and debt accessed about 9 months later.
We will issue RNS updates as formal confirmations are received.
Posted 03 January 2024
Sign In
Follow the stocks
