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Allana receives green light for 11 bln birr loan
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By Asrat Seyoum and Dawit Taye

Allana Potash, a Vancouver-based mining company listed on the Toronto Stock Exchange, is set to acquire financing for its mammoth potash mining project in Danakil Depression in the Afar Regional State of Ethiopia in the order of 11.1 billion birr from the little-known-in-Ethiopia Africa Export/Import Bank-Afreximbank. It is the largest loan to be approved for a private entity in Ethiopia to date.

Officials of Afreximbank, who were in Addis Ababa last week celebrating the Bank's 20-year anniversary, told journalists that the Bank is reviewing a loan proposal for one of the two giant potash projects in the Danakil Depression while refraining from divulging the name of the company. However, The Reporter's sources close to the Vancouver company on the other hand revealed that Allana has received the green light to secure the loan from the stated institution. Dubbed Dallol Potash the project is comprised of four concessions stretching 312 square kilometers in the North-Eastern part of the Danakil Depression, an area known for small-scale mining activities.

From 2010 to 2012 Allana completed a comprehensive exploration program including camp construction, diamond drilling, a 2D seismic survey and water drilling, according to information posted on the company's website. Furthermore, citing preliminary results obtained so far, it has presented a feasibility study to the Ministry of Mines for which it is expecting a positive feedback. According to the study, in the initial stages the company would start with the production of the one million tonnes per year with planned expansion of additional one million tonnes every year. The study is also useful in terms of upgrading Allana's exploration license to a mining license.

The company should obtain the mining license in order to move forward with its activities. The company needs mining license before advancing into construction of the factory plant and other transportation infrastructures. Among the major railway projects that Ethiopia has in the pipeline the one that connects the potash region of the depression to the port in Djibouti is one. The construction of large warehouse facilities and the temporary road network that runs from Dallol to Afdera (the major salt producing area of Ethiopia) where it connects with another road which stretches to Djibouti will also be some of the major civil projects awaiting the company.

According to the tentative schedule, the first shipment is due to leave the country by 2014.

In a related news, Afreximbank has also extended a credit facility to Kenyan Airways to the tune of USD 1.96 billion for aircraft acquisition, officials of the Bank also announced. The facility is mainly slotted to finance the acquisition of nine Boeing 787-800 (Dreamliners), one 777-300ER and 10 Embraer-190 aircraft.

The officials added that the first remittance-backed loan facility in the continent was provided to the Commercial Bank of Ethiopia by Afreximbank in collaboration with Citibank a little while back.

Apart from Kenya and Ethiopia the Bank is also active in the Sudan, Uganda and Tanzania. The Bank also is actively engaged in West Africa, particularly with cocoa trade, the hospitality industry and providing a credit line to commercial banks.

http://www.thereporterethiopia.com/index.php/news-headlines/item/642-allana-receives-green-light-for-11-bln-birr-loan