THE BOURSE WHISPERER: Kibaran Resources (ASX: KNL) announced it has received confirmation of ‘in-principle eligibility for cover’ for the company’s Epanko graphite project by the German Government.
The company said this was a milestone in the project’s financing process as the confirmation means Kibaran has met the first condition to receive an UFK-guarantee from the German Government in combination with financing by German state-owned KfW IPEX-Bank, one of the world´s leading development banks.
Kibaran, through KfW IPEX-Bank and with the support of its off-take customers ThyssenKrupp AG and a European Trader, has been investigating eligibility for an Untied Loan Guarantee – Garantie für Ungebundene Finanzkredite (UFK).
The company has been informed KfW received confirmation of in-principle eligibility for cover for the project.
According to Kibaran, the confirmation is based on ThyssenKrupp AG and its European trader supplying the German industry with graphite.
Kibaran explained the German Federal Government provides UFK coverage in the form of loan guarantees for loans awarded by lenders to the financing of eligible projects by providing lenders insurance against commercial and political risk.
Eligible projects contribute to the supply of critical natural resources to Germany in the form of a long-term off-take contract between the borrower and a German off-taker.
The project has to be economically viable and comply with international environmental and social standards.
“We are very pleased to have successfully achieved the first major milestone in our debt funding process,” Kibaran Resources managing director Andrew Spinks said in the company’s announcement to the Australian Securities Exchange.
“Confirmation of the in-principle eligibility for cover under an Untied Loan Guarantee follows six months of negotiations and provides a level of certainty for the bank to provide debt funding for the development of Epanko.
“This is significant as it strengthens our strategic alliance with Germany, which is the world’s fourth largest economy and is the leader in the development of graphite in the industry, having developed spherical graphite for the battery market, renewables and other uses for emerging markets.
“KfW IPEX-Bank is continuing to assess lending to Kibaran for UFK supported debt financing for the construction of our graphite project in Tanzania.”