Ethiopia's central bank, the National Bank of Ethiopia, has given its formal approval of the terms of the proposed full project finance package, which includes the right to use leasing as a form of finance, a debt/equity capital ratio of up to 70/30, recognition of historical expenditure in the calculation of the capital ratio, the right to use gold price hedging and the application of market-based long-term fixed interest rates.
Kefi's project-level partners, the Ministry of Finance and ANS Mining, can now subscribe to Tulu Kapi shares for their combined US$58 million equity investment and also for the mandated $160 million infrastructure financing.
Kefi's shares (AIM:KEFI) rose 16.77% to 1.66p Thursday after the news.
Once the full Tulu Kapi project financing is closed, its short-term security arrangements will fall away, although in the mean time they will facilitate Kefi's working capital arrangments and the project equity funding of the first part of the 24-month development programme.
The Ethiopian Ministry of Finance has also agreed to previously agreed terms
, allowing the execution and settlement of the first ANS Mining equity instalment of $11.4 million.
Kefi said implementation of financing could now flow between the consortium members and the project could proceed on the ground with the community and local authorities.
"The publicly guided development schedule provides for a cautious build up of site activities, whilst site security, detailed engineering and the first small community resettlement are carefully dealt with," it said.