Minbos Resources Ltd has announced that the company and Banco Angolano de Investimentos, S.A. (Banco BAI), Angola’s largest commercial bank, signed a final term sheet in relation to a US$12 million term loan to be provided by Banco BAI to Soul Rock Ltd, a subsidiary of the company for the Cabinda Phosphate Fertilizer Project.

Hilights;

  • US$12 million, seven-year term loan is to be provided by Banco BAI.
  • Interest rate of 7.5% per annum, with no interest payable in the first year and no principal payable for the first two years.
  • Banco BAI has set an aggressive timetable to finalise the loan documentation and normal legal and regulatory processes.
  • Finalising loan documentation will be subject to, among other conditions, securing guarantees provided by the Fundo de Garantia de Crédito (Credit Guarantee Fund), with this process now well advanced.
  • Funds to be used for construction of the project to supply critical phosphate fertilizer for the 2025 planting season.
  • Importantly, the US$12 million Banco BAI term loan, coupled with the US$14 million IDC loan facility and the US$10 million equity investment from the Angolan Sovereign Wealth Fund will allow Minbos to complete both Stage 1 construction and the Stage 2 expansion of the fertilizer plant.
  • Banco BAI has been a strong supporter of the efforts to develop agriculture along the Lobito Corridor through credit lending to agriculture focussed businesses such as Minbos.
  • Supporting the company’s ambitions in Angola are a number of Presidential Decree’s and initiatives, including:
    • Presidential Decree no. 213/23: Prioritising local production over imports including fertilizers.
    • Aviso No.10 ‘Granting Credit to the Real Sector of Economy’: requires financial institutions to grant a minimum quota of credit per year to borrowers in the agriculture sector, with the cost of credit capped at 7.5% for loans and 10% for working capital facilities.
    • The second measure provides qualifying borrowers up to 80% of the security required by the lenders, in the form of Public Guarantees from the Credit Guarantee Fund. The cost for the guarantee is 2%, which is also loaned by the lender.