Advise on €133 million project finance loan facilities for Ethanol and Renewable Energy Project in Sierra Leone
International law firm Eversheds, in association with joint advisors SNR Denton, has advised The Addax and Oryx Group on the signing of the recent EUR 133 million project finance loan facilities by Addax Bioenergy (SL) Limited with seven European and African development institutions for an integrated renewable energy and agriculture project near Makeni, in Sierra Leone.
The investment includes the development of a greenfield sugarcane plantation, the construction of an ethanol refinery and a biomass fuelled power plant, with the overall project being valued at EUR 258 million. The power plant will provide renewable electricity for the ethanol refinery and will supply approximately 20% of Sierra Leone’s national grid. This will be the first sugarcane ethanol project of its kind in Africa, and as such represents a major step forward in Sierra Leone’s efforts to become a hub for renewable energy alternatives and a model for sustainable investment in Africa.
Construction of the ethanol refinery and power plant will begin later this year, with production becoming operational in 2013. The Project already employs over 700 people and will create more than 2,000 jobs.
The Eversheds team was led by Howard Barrie, Partner in the Financial Institutions Group, who commented:
“This financing agreement marks a further milestone for what is an important project for Sierra Leone. It places the country at the forefront of the development of biofuels projects on the Continent and is already making a positive contribution to the lives of the local communities.
“This latest step is a testament to the commitment being shown to the project by The Addax and Oryx Group, the Government of Sierra Leone and the financial institutions involved. I am proud of the part we have played along with many others, including my former colleagues at SNR Denton, in helping to make this happen.”
Under the agreement, the EUR 133 million debt financing is being provided by:
– The African Development Bank (AfDB);
– The Emerging Africa Infrastructure Fund (EAIF);
– The Netherlands Development Finance Company (FMO);
– The German Development Finance Institution (DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH)
– The South African Industrial Development Corporation (IDC);
– The Belgian Development Bank (BIO);
– Cordiant managed ICF Debt Pool.
The Swedish Development Fund (Swedfund) and FMO are to join The Addax and Oryx Group as equity partners.