China Glass Holdings closes MIGA-backed financing in Nigeria

China Glass Holdings (CGH) has closed a $66.5 million MIGA-backed financing to fund the construction of a float glass manufacturing plant in Nigeria. Financed on a debt-to-equity ratio of 40/60, China Development Bank (CDB) provided a $26 million five-year loan with a 95% MIGA guarantee (closed in December 2017), and on the equity side CGH provided $40.5 million in capital with a 95% MIGA guarantee, which closed in April 2018. The deal marks the first time that MIGA has covered a Chinese investor in Africa and the first time the multilateral has covered a CDB loan.

One of the main risks for investors on the debt and equity side was the inconvertibility and transfer restriction resulting from the lack of foreign exchange in Nigeria over the past few years. However, the project took place in a special economic zone of Nigeria which helped MIGA extend the guarantees which cover transfer restriction, expropriation, and war and civil disturbance. Historically, MIGA has not been able to offer such cover in Nigeria, but MIGA’s regional head of Africa, Hoda Moustafa tells TXF that she hopes this transaction marks "the beginning of an important relationship.”