Danakali Receives Credit Approval for Power Plant Construction
This credit approval follows the recent US$200 million senior debt facility to fund construction and project execution.
August 9, 2019: Danakali Ltd – Danakali receives credit approval for power plant construction
This is another important step in advancing project financing towards completion..
Danakali Ltd (ASX:DNK) has been granted formal credit approval by Afreximbank to provide a US$42 million guarantee supporting the power plant for the Colluli Potash Project in Eritrea.
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.