On June 12, 2015, MIGA issued a guarantee of $70 million covering an equity investment by KLF Capital S.a.r.l. of Luxembourg in Aceria de Angola SA in Angola. The coverage is for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project consists of the construction of a steel rebar plant northeast of Luanda. MIGA’s coverage is for the first phase of the project, which involves the construction of a melting shop that will convert scrap metal into steel billets and a rolling mill that will produce rebar and wire rod from these billets. The project will have an installed capacity of 250,000 tons per year upon completion of phase one.
The project will contribute to economic diversification in Angola and increase economic activity outside of the oil sector, which accounts for roughly half of the country’s GDP. The company will eventually employ 425 Angolan nationals when the plant is in operation and is currently employing nearly 500 people during the construction phase. An additional 1500 indirect jobs are expected to be generated through the scrap-collection companies. The project will also provide the first significant local production of steel rebar.
The first pillar of the World Bank Group’s Country Partnership Strategy for Angola focuses on supporting integrated national economic diversification by revitalizing rural economies toward greater competitiveness and employment. The focus will be on the strengthening of the non-oil economy, with emphasis on recuperating traditional lines of business that suffered greatly during the war. MIGA’s support for this investment fully is aligned with these objectives.