Aarti Steel Nigeria Ltd.

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MIGA has issued additional coverage in the amount of $12.83 million for the Aarti Steel Nigeria Ltd. (ASNL) Project in Nigeria. The additional coverage is for  $13.5 million in new non-shareholder loans to the project enterprise from the State Bank of India.. The coverage is against the risks of expropriation, transfer restriction, and war and civil disturbance. MIGA issued guarantees of $11.4 million to support the project in 2007. The additional coverage of $12.83 million is supporting an expansion of an existing steel galvanizing facility located in Otta, Ogun State, Nigeria. Aarti Steel Nigeria Limited has constructed a greenfield manufacturing plant for steel galvanizing in Ogun State. This facility has a manufacturing capacity of 50,000 tons a year, and produces galvanized steel coils, galvanized plain steel sheets, and galvanized corrugated (roofing) steel sheets. The expansion entails an increase in the manufacturing capacity to 100,000 tons a year by setting up an additional galvanizing line.  The increased capacity of the plant will allow ASNL to meet the growing demand for processed steel goods in Nigeria and neighboring countries. The expansion will deploy the latest state-of-the-art and environmentally friendly technology. When the facility is fully online, it is expected to be the largest local manufacturer. Nigeria's increasing wealth and population is driving market demand for galvanized plain and galvanized corrugated steel sheets. Galvanized corrugated sheets are used as roofing material on nearly all houses in Nigeria and the surrounding region. The plain metal sheeting will also be used in a variety of industries including agricultural implements, consumer durable goods, hardware for domestic and industrial construction, railways, and machinery manufacturing. The project will also bring modernized and efficient processes to Nigeria's emerging manufacturing sector. This project is consistent with Nigeria's strategy to develop the non-oil private sector, as well as the World Bank Group's Country Partnership Strategy which identifies increased foreign direct investment in the non-oil private sector as a critical element of the country's reform efforts. The project also meets MIGA's priorities of supporting South-South investments and investments in sub-Saharan Africa.

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