Standard Bank Group has been appointed as financial adviser and mandated lead debt arranger by Sundance Resources in a USD3.5-billion project to build port and rail infrastructures for the Mbalam-Nabeba Iron Ore Project in Central Africa.
Leading international engineering and construction company Mota-Engil Africa was appointed as the contractor to build the port and rail link in Cameroon and Congo-Brazzaville. Mota-Engil Africa has extensive experience in sub-Saharan Africa, including on-going construction of a bulk commodity railway in Malawi operated by Brazilian mining group Vale.
Rob Bessinger, Head of International Client Coverage, at Standard Bank Group, says: "Standard Bank Group believes the Mbalam-Nabeba Iron Ore Project is a tier one asset that will generate significant revenue once in production. However infrastructure is key to unlocking its potential.
"We have worked with Mota-Engil Africa on projects in the past, and we firmly believe they have the experience, credibility and capacity to put together a consortium that will succeed in building this project within the timeframe and budget outlined in their tender. Moreover, we are confident in our ability to raise funds for the construction phase of the project."
Project equity discussions are well advanced with a wide variety of potential funding. Partners, export credit agencies, development funds and commercial banks have already expressed interest in providing debt funding for the project, which is projected to achieve financial close by mid-2015 with construction expected to take a further 3.5 years.
Standard Bank Group has already held discussions with a wide variety of potential funding partners and has received several expressions of interest from export credit agencies and development finance institutions. Insurance agencies have also expressed interest in providing protection for the commercial banking tranche.
There is considerable support for the Mbalam-Nabeba Project from these institutions, including Western and Chinese providers of project equity and debt capital. Sundance has commenced work with Standard Bank Group and Mota-Engil Africa to convert the indicative term sheets to credit-approved term sheets by the end of this calendar year.
For more on Standard Bank Group's capabilities in project finance, see www.standardbank.com/cib.
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