MIGA has issued a $0.4 million guarantee to Manaksia Limited of India covering a portion of its $6.5 million equity investment in MINL Limited of Nigeria. MIGA has also provided $6.6 million in coverage for non-shareholder loans to MINL, in the amount of $5 million and $1.9 million, from State Bank of India of the UK and ICICI Bank UK Limited of the United Kingdom, respectively. All three guaranteeshave a term of up to five years and cover against the risks of transfer restriction, expropriation, and war and civil disturbance.
MINL manufactures and sells bottle caps and sheet metal in Nigeria. The investment and loans guaranteed under this project will support the construction and operation of a metal processing plant. MINL will use the plant to expand production into three new product lines: galvanized corrugated steel sheets, aluminum sheets, and aluminum alloy ingots. Galvanized corrugated steel sheets are the main roofing material for 90 percent of Nigerians. MINL has already had significant success with bottle caps, increasing its market share of crown caps from 8 percent in 1998 to 52 percent in 2002.
Local procurement of goods and services for the new plant in Ogun State is estimated at $8 million annually. Seventy percent of that would be spent in Ogun, the rest in the north and east of Nigeria. The project is expected to generate about $3 million in corporate tax revenue a year. The project will employ 118 local people. Staff will receive training on production improvement, industrial safety, effective supervision, and computer-controlled processing.
This project meets several of MIGA’s priorities as it supports a small and medium-sized enterprise investment, a South-South investment, and the diversification of MIGA’s portfolio in Nigeria, an IDA-IBRD blend country. The project also fits into the government’s strategy to diversify the economy beyond oil.