Kefi’s Ethiopian project ready for final finance package

19th June 2023 By: Tasneem Bulbulia - Senior Contributing Editor Online

Aim-listed Kefi Gold and Copper reports that all outstanding major financing conditions precedent requiring Ethiopian government input in relation to the company’s Tulu Kapi gold project have been met.

This significant development enables the Tulu Kapi individual syndicate members to proceed to final committee and board reviews and approvals for the $390-million project finance package, as set out in the final umbrella agreement.

Kefi says $370-million of this package has already been covered by arrangements at the project and subsidiary level with first-tier banks, contractors and investors, including the Ethiopian government itself at both the federal and the regional levels.

The final $20-million of the financing package has also now been allocated to a specific set of parties, with a view to it being finalised and structured over the next few months as all the standard procedural conditions precedent are completed to enable the funds to flow.

Kefi has now resolved all major conditions precedent that were remaining with the Ethiopian government for the project financing.

Accordingly, details are now being checked by advisers to each syndicate member ahead of the signing of detailed binding definitive documentation in the near term.

The first major condition precedent was for the two banks in the funding syndicate to receive the same rights and protections in Ethiopia.

This was achieved in March when Ethiopia was granted African Finance Corporation country membership, a strategic initiative for Ethiopia and for the bank.

The second was the establishment of a permanent security force around Tulu Kapi to ensure that construction and the project generally could proceed unhindered. This was achieved in April, with the triggering of escalated security in Tulu Kapi’s surrounding areas by the relevant government agencies.

The final material condition precedent was for clarification by the Ethiopian Central Bank of specific procedures for the project, agreeing rights to international bank accounts. This was clarified last week.

These three critical recent breakthroughs in as many months will now be built into the syndicate’s detailed definitive documentation.

The boards and committees of the government agencies and the project finance syndicate of banks, contractors and investors are now being updated on all details so that they may formally consider final approvals for project launch.


Kefi outlines that the Ethiopian government and its agencies have continued to show support for the development of Tulu Kapi above and beyond meeting the aforementioned conditions precedent by undertaking several further recent initiatives.

This includes that the Ethiopian Electricity Production Corporation has procured the major components for the project’s connection to the main power grid to ensure compliance with scheduled commissioning of the plant in 2025.

Moreover, the Ethiopian Roads Authority has reaffirmed the delivery schedule for the new all-weather access road.

Also, a memorandum of understanding has been signed with the regional government to increase the aggregate government equity investment in the project, from $20-million to $30-million, as the government is keen to preserve an equity interest of about 25% alongside Kefi’s about 75%.

Lastly, the Minister of Mines has circulated, for stakeholder comment, draft legislative reforms to encourage exploration and mining in Ethiopia. Kefi says it is actively involved in the various industry associations and is assisting where it can.

“Our take-off in Ethiopia coincides with that in Saudi Arabia. These are the two largest jurisdictions in the highly prospective Arabian Nubian Shield.

“Both countries are now proactively supportive and these continuing positive developments help to vindicate our longstanding focus there since 2008 and our tenacity to have successfully assembled three advanced projects and a world-class pipeline for future exploration,” executive chairperson Harry Anagnostaras-Adams says.