Afreximbank, NEXIM to provide $50m project preparation fund for Nigerians
African Export-Import Bank (Afreximbank) and Nigeria Export-Import Bank (NEXIM aim to mobilize up to $50 million in the form of project preparation funds for investments in Nigeria.
This followed the signing of a Memorandum of Understanding (MoU) to establish a Joint Project Preparation Fund that will provide early project preparation financing and technical support services to public and private sector entities operating in Nigeria’s trade sector.
Under the terms of the, according to a statement by continental organization, yesterday, both banks would collaborate through the Fund to unlock investments into sectors such as export manufacturing, agro-processing, solid minerals development and beneficiation services, as well as healthcare, Information and Communications Technology, and creative industries.
They would support public and private sector investors by providing technical and financial support services that will result in a steady pipeline of well-structured, bankable projects that Afreximbank, NEXIM and other financial institutions can readily finance.
The Fund has been designed to assist the early development process of projects from concept stage to bankability by covering the preparation of feasibility studies, project development and advisory services and related costs.
Prof. Benedict Oramah, President of Afreximbank, was quoted as saying, “The execution of this Memorandum of Understanding marks yet another significant milestone in our collaboration with NEXIM.
“I am particularly pleased that Afreximbank and NEXIM are boldly venturing upstream to help investors develop well-structured projects that meet market standards.
“This intervention is timely as the Fund will play a catalytic role in accelerating the diversification of the Nigerian economy by ensuring a steady flow of bankable projects in priority tradable sectors in a timely manner.
“In addition to enhancing bankability, the Fund will, on a case-by-case basis, undertake feasibility studies to assess the viability of accessing markets in the sub-region, thereby promoting intra-African trade under the AfCFTA.
“We are pleased to be replicating a similar initiative we pioneered in Malawi in partnership with Malawi Export Development Fund (EDF) and look forward to more opportunities across the continent.”
Similarly, Mr. Abubakar Abba Bello, Managing Director of NEXIM, said: “We are quite pleased by this opportunity to, once again, partner with Afreximbank in proffering a solution to one of the major challenges that have limited the flow of credit to the Nigerian export sector.
“The Fund is designed to mitigate the project selection challenges, particularly amongst the SMEs, towards boosting their contribution to formal exports. This technical expertise will therefore enhance NEXIM’s implementation of its export development programme, especially with regards to the State Export Development and industrialization initiatives.
“This partnership strongly aligns with the NEXIM’s mandate and strategic plan and will no doubt facilitate its intervention towards attracting critical investments in trade enabling infrastructure and the promotion of value-added exports.”