By Mike Etim, Uyo
As a step towards revamping the moribund Oku Iboku pulp and paper mill in Cross River and Akwa Ibom State, the Executive Directors of the African Development Bank (AFDB) have approved a US$30 Million loan to finance the rehabilitation project.
The plans to revamp the company were concretised on Wednesday last week in Tunis according to a statement issued by AfDB.
The statement said that the Oku Iboku Pulp and Paper Project (OKIPP) required rehabilitation and upgrade since they make newsprint and related papers in the two Nigerian states.
The statement added that, “In line with the Bank’s Long Term Strategy, the project supports inclusive and green growth, by contributing to a better management and use of forestry resources and generating
linkages with local economy. It is aligned with Nigeria’s newly approved Agricultural Transformation Agenda, the Bank’s Country Strategy paper for Nigeria and the Bank’s Regional Integration
Strategy for West Africa by contributing to the modernization of agriculture and infrastructure development, increasing intra-regional trade as well as promoting local entrepreneurship.”
Furthermore, the statement states that ultimately, the project is expected to deliver annual savings on newsprint paper imports to Nigeria and tax revenues to both State and Federal Governments.
According to the statement, in addition to its strong contribution, to job creation in the region, OKIPP will develop pulp and paper technological skills through a planned transfer of specialized skills
and development of SME linkages.
“With an estimated total cost of US $200 million, the project will be financed on a 60:40 debt to equity ratio. The debt will be sourced from DFIs and Nigerian commercial banks. The bank will provide a
senior loan of US $30 million and is acting as the Mandated Lead Arranger.
Sponsored by Negris Group, an indigenous engineering company servicing the energy and industrial sectors in Nigeria, the main assets consist of pulp and paper mills, a wood concession and a gas-fired power generation plant.
The Oku Iboku Paper Mill complex was established as a Government -owned company, but shut down in the 1990s and acquired by Negris following a privatization process in 2008.