MIGA, a member of the World Bank Group, has issued guarantees amounting to $71.9m in support of the construction, operation and maintenance of a float glass plant in Nigeria. The guarantees cover a loan by China Development Bank, and an equity investment and non-shareholder loan by CNG (Nigeria) Investment Ltd., respectively.
When completed, the plant will have a capacity of 500 tons per day, producing tinted glass and solar control coated glass. The factory will contribute to the development of the local glass supply chain, sourcing 80 percent of its raw materials domestically, and further supporting the development of the local network of glass distributors and traders downstream.
The project sponsor, China Glass Holdings Ltd. (CGHL), will provide technical training to local staff. CGHL is a leading flat glass producer worldwide, and the largest coated glass producer in the People's Republic of China.
Some 80 percent of production is expected to be sold locally to meet rapidly rising domestic demand, while the balance will be exported to other countries in West Africa.
Nigeria's infrastructure development has led to high demand for float glass, however, most supply at present is through imports, and is insufficient to meet domestic needs.
"This project helps Nigeria diversify away from the oil and gas sector," said Keiko Honda, CEO and Executive Vice President of MIGA. "It will also help integrate domestic and regional markets, and stimulate entrepreneurship, consequently contributing to growth and job creation."
MIGA is providing guarantees for up to 10 years against Transfer Restriction, Expropriation, and War and Civil Disturbance. The guarantees cover 90 percent ($38.7m) cover on equity, and 95 percent ($32.2m) on debt.
"MIGA's political risk insurance cover is a critical component of our overall risk management framework within Nigeria," said Cui Xiangdong, CEO of China Glass Holdings Ltd.