The deferral of the tranche 2 funding by Dankali and Africa Finance Corporation on the Colluli sulphate of potash venture in Eritrea allows time for the satisfaction of the remaining conditions.
Sydney and London-listed potash development company, Danakali, and Africa Finance Corporation (AFC) have agreed to extend the deadline to November 21 for the second tranche of an equity investment by the bank.
AFC announced in December it would take a $50m equity share in Danakali of which $21.5m has already been paid – a sum that has allowed initial development of Danakali’s project: the Colluli sulphate of potash venture in East Africa’s Eritrea.
The project is directly owned on a 50:50 basis through a subsidiary Colluli Mining Share Company (CMSC) with the Eritrean government. Potash contains potassium, nitrogen and sulphur which is beneficial to economic development as a crop-growing fertiliser.
In addition to the equity invested, AFC has with African Export-Import Bank agreed to provide $200m in senior debt finance to Danakali which is enough to see the project through to completion.
“We are pleased to announce this extension,” said Neils Wage, CEO of Danakali in a statement. “The progress reflects the constructive dialogue and partnership between the company and AFC,” he said.
The deferral of the tranche 2 funding was announced on March 31 just as the global impact of the COVID-19 disease was making itself felt. The extension allows time for “… satisfaction of the remaining conditions precedent and is considered necessary in response to, amongst other things, the constraints arising from global restrictions imposed due to the COVID-19 pandemic,” the company said.