Billion kroner financing and Danish carpets for luxury hotel in West Africa
A billion kroner loan from EKF secures a large order for a Danish company who will not be selling sand in Sahara but carpets to a hotel and conference centre project in Benin
EKF Denmark´s Export Credit Agency (EKF) has just approved a loan to Benin in West Africa for the construction of a 5-star hotel under the Sofitel hotel chain. This helps to support Benin’s strategy of attracting more tourists to the country.
”EKF is proud of contributing to continued economic growth for both Benin and Danish exporters”, says Thomas Hovard, CCO at EKF. “This transaction is an excellent illustration of our outreach and proactive strategy of using global investigative sales efforts to bring back orders for Denmark. Orders that would have gone to companies from other countries, if EKF had not been involved”, says Thomas Hovard.
Financing worth DKK 1.2 billion
The value of the project is EUR 158.5 million which is equivalent to DKK 1.2 billion. The money will be spent on renovation of an existing conference centre as well as design and construction of a luxury hotel with 193 guest rooms in the city of Cotonou. The newly renovated conference centre consists of both offices, a casino, a leisure centre and a theater. The project has been named ”The Sofitel & International Congress Centre Project” and will be located on the beach near the Gulf of Guinea, approximately a kilometer away from the airport and the city.
The loan from EKF has been issued directly to the Ministry of Finance in Benin with MUFG Bank as the lead arranger and agent. MUFG Bank is also the lead arranger of another parallel commercial loan worth EUR 47 million.
Securing contracts for Danish exporters
The project secures export contracts to Denmark worth an amount in the three-figure million range, contracts which would not have materialised without EKF´s involvement in the project.
Summa, the Turkish contractor, will be in charge of the construction. Based on recommendations from EKF, they have appointed the Danish company PAA Project Finance A/S to handle the Danish contracts within freight, materials and support.
One of the Danish subcontractors is Fletco Carpets, located in the Danish city of Bording close to the city of Herning in Jutland. To Fletco Carpets, EKF´s involvement in the project has resulted in a huge order which is the Danish carpet company´s first order to the African continent. This order has kept the company busy. Fletco Carpets, who is already operating with three shifts, had to reorder priorities. Like in many other lines of business, the company has been seriously challenged by irregularities in the supply chains and extended delivery time.
”This is a really significant order for us. It has definitely opened our eyes for the growing business potential in the region. Besides, we would never have received the order without EKF”, says Nils Juul Larsen, CEO of Fletco Carpets. The company will supply 745 square metre of carpet tiles.