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The African Export-Import Bank (Afreximbank), a pan-African multilateral financial institution mandated to finance and promote intra- and extra-African trade, has announced the disbursement of a $120-million financing facility to Djibouti’s Great Horn Investment Holding (GHIH) for the execution of a series of development projects in the country’s Damerjog Industrial Development Free Trade Zone.

The deal was announced after a meeting between Afreximbank President, Benedict Oramah, and President Omar Guelleh of Djibouti, on the sidelines of the ongoing Summit of Heads of State of the African Union.

According to a statement by Afreximbank, the deal is part of a total facility amount of $155 million for work on the free trade zone. The remaining $35 million is being financed through Banque pour le Commerce et l'Industrie Mer Rouge (BCIMR) of Djibouti. Proceeds of the facility will be used for the completion of the Damerjog Oil Jetty, which will provide marine connectivity to the free trade zone, and for the construction of a 150,000m³ first storage depot/oil tank farm, as well as for other costs related to the projects.

The deal, which is Afreximbank’s first in Djibouti in collaboration with GHIH and the government, is targeted at supporting the development of a trade-enabling infrastructure to assist Djibouti in achieving its plan to become a regional trans-shipment and logistics hub. It will also promote intra-African trade, given that Djibouti’s economy is largely based on the provision of marine services to neighbouring nations Ethiopia and Somalia, by offering them a gateway for ocean-borne freight, Afreximbank said.

The facility is providing support and capacity to SOMAGEC, a Moroccan construction company which is Afreximbank’s Intra-African Trade Champion. Under the Intra-African Trade Champion programme, Afreximbank supports African companies to execute infrastructure projects in other African countries and assists them to compete globally with international players.

Afreximbank has been a key supporter of the engineering, procurement, and construction (EPC) market in Africa with financing and facilitation interventions totalling $13 billion in the last six years. This includes financing of more than $7 billion worth of EPC-related transactions and issuance of trade instruments worth more than $6 billion to support and facilitate the award of contracts to African contractors.

GHIH, a state-owned investment holding vehicle of the Government of Djibouti, is responsible for logistics and transportation infrastructure. It holds interest in about 18 of the largest state-owned companies in the country, with a portfolio that includes companies in shipping, bunkering, management of free zones, storage, road transport and port security.