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Nedbank Capital and the Bank of China in Johannesburg have announced the raising of debt capital to fund Mamba Cement, a new entrant on the South African cement scene
The US$220mn Mamba Cement plant will have a capacity of more than one million tonnes a year and will be built at an established limestone deposit near Northam in Limpopo, the company said.
It will be jointly funded by China's Jidong Development Group, the China-Africa Development Fund and a South African cement company.
Unlike traditional overseas investment financing, Mamba received US$120mn through project financing, which is based on the projected cashflow of the project rather than the balance sheets of its sponsors, according to Jidong Group.
The loans are jointly provided by Nedbank South Africa and Bank of China's Johannesburg office.
The majority shareholders in Mamba Cement are Jidong Development Group and the China-Africa Development Fund (CAD Fund), with a 51 per cent shareholding in the project.
Jidong and the CAD Fund’s shareholding in Mamba Cement is held through African Rhino Cement, which is 60 per cent owned by Jidong and 40 per cent by the CAD Fund.
Chen Ying, vice-president of China's Jidong Development Group, said the success of the financing deal meant the South African bank's accreditation to Chinese companies.
"Project financing offers Chinese companies a new way to make overseas investments," said Chen.
The electricity generation system together with the cement plant makes Mamba the first cement company possessing waste heat power generation technology on the African continent.