The African Export-Import Bank (AfrEximBank) has indicated intentions to finance $600 million potash project in Ethiopia.
The bank is currently conducting its annual meeting and celebrating its 20th anniversary in Addis Ababa.
“In Ethiopia, we are at the moment looking at potash project. It is about $600 million and we are still at the preliminary stage, but we are positive about that,” said Denys Denya, AfrEximBank’s Executive Vice-President for Finance, Administration and Banking Services.
Potash is one of the main components in fertiliser production.
A total of eight companies have explored the Danakil depression in the Afar region of northern Ethiopia for potash.
Currently, Allana Potash Corporation of Canadian is working on a $642 million potash mine project in Ethiopia.
According to information from the Geological Survey of Ethiopia, Alana Potash plc has drilled more than 30 holes and identified a deposit of 673 million tons measured and 596 million tons inferred.
Power project
Research by Green Markets, a fertiliser industry information provider, shows that globally, potash production capacity was estimated to rise 38 per cent to 96.5 million metric tonnes by 2017 with the demand rising 26 per cent to 66 million tonnes.
Currently, the priority financing areas of AfrEximBank are agribusiness, transport and hospitality services.
“Our appetite at the moment is agribusiness where we can add value and we encourage investors in this area to approach us, especially in countries like Ethiopia,” Mr Danya told the African Review.
“It is our intention to continue to develop our activities in East Africa,” said Mr Jean-Louis Ekra, the President and Chairman of the Board of Directors at AfrEximBank.
“We have a couple of projects on course. We have been invited to look at some windmill electricity project here in Ethiopia.
We have been also been looking at financing a small power project with the involvement of China's Exim Bank,” Mr Ekra added.
AfrEximBank is currently financing different projects in East Africa, including large sugar project in Sudan and coffee development in Uganda.
In addition, the bank is also at the final stage of financing power project in Tanzania with other financial institutions, according to Mr.Denya.
Over the past 20 years, AfrEximBank has been providing 85 per cent of its total financing to private sector, with the remainder going to the public sector.