By ADAH ABBA, Abuja
The quest to see the mining sector operate at commercial level with big-time investors participating in Nigeria has received a boost with the signing of a partnership agreement by a leading pan-African infrastructure solution provider, Africa Finance Corporation, AFC, and the Solid Minerals Development Fund, SMDF, in Cape Town, South Africa to deploy project development funding and technical advisory in operations of commercial scale mining projects in the country.
This is in addition to the AFCs flagship investment in the first commercial scale gold mining project in Nigeria, the Segilola Gold Mine in Osun State, through an innovative financing package comprising debt, equity, and a stream.
According to SMDF management, only an insignificant fraction of over US$700 billion worth mining projects potentials in the country receives the necessary
funding, but under the Memorandum of Understanding, MoU and leveraging AFCs project development expertise, AFC and SMDF will co-develop mining projects to mitigate risks that would otherwise have prevented financing to drive bankability.
This intervention will create a pipeline
of high-quality and feasible projects with considerable economic impact and
scope for AFC and SMDF to deploy their balance sheets, a statement by the Fund, obtained from The Truth Online said.
Since 2014, AFC has deployed US$900+million from its balance sheet and mobilized US$250 million in Mining Projects across Africa in several minerals critical for the energy transition, including bauxite, manganese and copper.
As such, the alliance will focus primarily on precious metals and minerals critical to the global energy transition. AFC and SMDF will combine their own funds with innovative investment tools to reduce risks around exploration, drilling, confirmation of deposits, and third-party development costs, including technical and environmental studies, project structuring, and project contract
negotiations.
Only projects that have completed phases of pre-feasibility studies and secured all relevant government and regulatory permits are eligible for consideration.
The partnership aligns with AFC's mission to foster industrial development, unlock value from natural resources, and catalyze significant long-term growth and diversification opportunities. It also advances SMDF's 2025 Strategy to build investment partnerships that would spur private sector-led investment in the mining sector and position Nigeria as a leading emerging mining destination.
Speaking, the Executive Director and Chief Investment Officer, Africa Finance Corporation, Sameh Shenouda, said,
"AFC is a premier investor in Nigeria's mining sector, a top priority for the Federal Government to attract Foreign Direct Investment and drive diversification of the economy.
"This partnership with the SMDF will enable the Corporation to continue to drive the closure of bankable mining projects that are critical to Africa's economic diversification efforts, value addition and the energy transition" . "We are delighted to work with an institution of such high repute, particularly one in our host country, Nigeria."
On her part, the Executive Secretary and CEO of SMDF, Fatima Umaru Shinkafi, who signed on the Nigerian side, said: "We are pleased to sign this agreement with the Africa Finance Corporation today, signifying AFC's commitment to driving sustainable economic growth through economic diversification and
industrialisation.
"This agreement is a significant step for SMDF as we develop the mining sector in Nigeria and position the country as a stable and low-cost supplier of critical minerals.
"Africa Finance Corporation led the financing of the only commercial mine in Nigeria so, naturally, we see a key opportunity to combine AFC's investment track record with the SMDF's technical talent, intellectual capital, deep sector knowledge, and expertise on growth-oriented projects, where our collaboration can help create value."
The Solid Minerals Development Fund is a Nigerian Government owned Fund
established to drive and catalyze private sector-led investments in Nigeria's
mining sector. The SMDF's mission is to actively pursue investments that will derisk the Nigerian mining sector, to be the partner of choice for opportunities,
and to empower the economic development and diversification of the
Nigerian economy, while providing flexible financing.
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