KEFI to launch Tulu Kapi Gold Project in Ethiopia
KEFI Gold and Copper has announced plans to launch the Tulu Kapi Gold Project in Ethiopia.The move follows a confirmatory of being on track to secure the necessary funding and approvals for the project, with a diverse mix of financing sources and supportive stakeholders.
The firm has a secured development budget of $320 million for the project, excluding a $100 million historical equity investment. The financing structure includes a mix of debt and equity. Recent regulatory changes have improved the equity funding structure, lowering overall finance costs. These changes include foreign exchange exemptions, an increase in the debt-to-equity ratio, and reinvestment of local currency retained earnings into new business sectors as foreign direct investment.
Tulu Kapi Gold Project
KEFI plans to raise $100 million through the issuance of two types of Equity Risk Notes, one for multinational corporations (MNCs) with no operations in Ethiopia and another for those with accumulated retained earnings in Ethiopian operations. The notes are fixed at a 12% per annum interest rate and are repayable in cash from operations or in KEFI equity.
The company has received initial board approval from a major local equity-capital provider for the ERN. Additionally, progress has been made with other investors, including the lead bank (Eastern and Southern Trade and Development Bank), the Ethiopian Federal and Regional Governments, and the co-lender (Africa Finance Corporation). All syndicate members are working towards finalizing documentation by mid-2024 for the full project launch and drawdown of funds.
