AFC to boost commercial scale mining projects in Nigeria
Africa Finance Corporation (AFC), an infrastructure solutions provider, and the Solid Minerals Development Fund (SMDF) are partnering to deploy project development funding and technical advisory to fast track closure and operations of commercial scale mining projects in Nigeria. This follows AFC’s flagship investment in the first commercial scale gold mining project in Nigeria, the Segilola Gold Mine in Osun State.
Challenges around development and finance mean that only a fraction of over $700 billion of potential Nigerian mining projects receive the necessary funding, according to SMDF. Under the memorandum of understanding (MoU) and leveraging AFCs project development expertise, AFC and SMDF will co-develop mining projects to mitigate risks that would otherwise have prevented financing to drive bankability. This intervention will create a pipeline of high-quality and feasible projects.
Since 2014, AFC has deployed over $900 million from its balance sheet and mobilised $250 million in mining projects across Africa in several minerals critical for the energy transition, including bauxite, manganese and copper. As such, the alliance will focus primarily on precious metals and minerals critical to the global energy transition. AFC and SMDF will combine their own funds with innovative investment tools to reduce risks around exploration, drilling, confirmation of deposits, and third-party development costs, including technical and environmental studies, project structuring, and project contract negotiations. Only projects that have completed phases of pre-feasibility studies and secured all relevant government and regulatory permits are eligible for consideration. The partnership aligns with AFC’s mission to foster industrial development, unlock value from natural resources, and catalyse significant long-term growth and diversification opportunities.
”AFC is a premier investor in Nigeria’s mining sector, a top priority for the Federal Government to attract foreign direct investment and drive diversification of the economy. This partnership with the SMDF will enable the corporation to continue to drive the closure of bankable mining projects that are critical to Africa’s economic diversification efforts, value addition and the energy transition,” said Sameh Shenouda, executive director and chief investment officer of AFC. ”We are delighted to work with an institution of such high repute, particularly one in our host country, Nigeria.”
Fatima Umaru Shinkafi, executive secretary and CEO of SMDF said, ”We are pleased to sign this agreement with the Africa Finance Corporation today, signifying AFC’s commitment to driving sustainable economic growth through economic diversification and industrialisation. This agreement is a significant step for SMDF as we develop the mining sector in Nigeria and position the country as a stable and low-cost supplier of critical minerals. Africa Finance Corporation led the financing of the only commercial mine in Nigeria so, naturally, we see a key opportunity to combine AFC’s investment track record with the SMDF’s technical talent, intellectual capital, and deep sector knowledge and expertise on growth-oriented projects, where our collaboration can help create value.”