Nedbank Capital and the Bank of China Johannesburg have jointly raised debt capital to fund a new entrant into the Southern African cement industry.

This is one of the first pure limited recourse project finance deals undertaken and funded by Chinese entities on the African continent.

Mamba Cement is expected to produce a highly sought after product both from a quality and versatility point of view, with a sustainable transport advantage due to its proximity to the major cement demand centres of Johannesburg, Pretoria, Mpumalanga, Rustenburg and Brits.

Zhikun Qiu, Chief Executive Officer at Bank of China Johannesburg says the deal held particular appeal given the significant economic development potential it holds for southern Africa as a whole. “A new entrant will not only help to instil competition into the market, but also serve to stimulate economic growth and job creation in line with the country’s established development plans. The Bank of China is pleased to have been a key part of such an economically relevant initiative,” he said.

The Jidong Development Group, the China-Africa Development Fund and WIPHOLD provided the equity required for the project.  The R1.1 billion funding for the project was structured on a greenfields project finance basis.

According to Mike Peo, Head of Infrastructure, Energy & Telecommunications at Nedbank Capital, the highly complex project finance deal is the first opportunity for Nedbank and Bank of China Johannesburg to work together as joint mandated lead arrangers and is testament to the two banks’ ability to work together. Based on the success of the Mamba Cement project, Jidong has approached Nedbank Capital and Bank of China Johannesburg to act as its banking partners in its expansion efforts into the rest of the continent.

Mamba Cement will construct a cement plant with a capacity of more than one million tonnes per annum located at an established limestone deposit near Northam in Limpopo. Once operational, Mamba Cement will produce and sell cement into the blended cements, readymix and construction industries across South Africa.