AFC partners Solid Minerals Development Fund to unlock Nigeria’s $700bn mining potential
By Onome Amuge
Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider,has announced a partnership with the Solid Minerals Development Fund (SMDF) to deploy project development funding and technical advisory to enhance closure and operations of commercial scale mining projects in Nigeria.
The SMDF, in a statement, noted that challenges around development and finance mean that only a fraction of over $700 billion of potential Nigerian mining projects receives the necessary funding.
To this end,AFC and SMDF, under the Memorandum of Understanding (MoU) and leveraging AFCs project development expertise, will co-develop mining projects to mitigate risks that would otherwise have prevented financing to drive bankability. The intervention is also expected to create a pipeline of high-quality and feasible projects with considerable economic impact and scope for AFC and SMDF to deploy their balance sheets.
On its part, AFC stated that it has since 2014, deployed over $900 million from its balance sheet and mobilized $250 million in mining projects across the world’s second largest continent by size and population, in several minerals critical for the energy transition, including bauxite, manganese and copper.
As such, the alliance is designed to focus primarily on precious metals and minerals critical to the global energy transition. AFC and SMDF also stated that they will combine their own funds with innovative investment tools to reduce risks around exploration, drilling, confirmation of deposits, and third-party development costs, including technical and environmental studies, project structuring, and project contract negotiations.
However, only projects that have completed phases of pre-feasibility studies and secured all relevant government and regulatory permits are eligible for consideration.
The partnership aligns with AFC’s mission to foster industrial development, unlock value from natural resources, and catalyze significant long-term growth and diversification opportunities. It also advances SMDF’s 2025 Strategy to build investment partnerships that will spur private sector-led investment in the mining sector and position Nigeria as a leading emerging mining destination.
Sameh Shenouda, executive director and chief investment officer, Africa Finance Corporation, noted that AFC is a premier investor in Nigeria’s mining sector,adding that the programme is a top priority for the federal government to attract Foreign Direct Investment (FDI) and drive diversification of the economy.
According to Shenouda, the partnership with the SMDF will enable the Corporation to continue to drive the closure of bankable mining projects that are critical to Africa’s economic diversification efforts, value addition and the energy transition.
“We are delighted to work with an institution of such high repute, particularly one in our host country, Nigeria,” he said.
Fatima Umaru Shinkafi, executive secretary and CEO of Solid Minerals Development Fund, expressed the organisation’s pleasure to sign the agreement with the Africa Finance Corporation, as it signifies AFC’s commitment to driving sustainable economic growth through economic diversification and industrialisation.
“This agreement is a significant step for SMDF as we develop the mining sector in Nigeria and position the country as a stable and low-cost supplier of critical minerals. Africa Finance Corporation led the financing of the only commercial mine in Nigeria.
Shinkafi described the collaboration as a key opportunity to combine AFC’s investment track record with the SMDF’s technical talent, intellectual capital, and deep sector knowledge and expertise on growth-oriented projects, committed to creating value.
The development follows AFCs flagship investment in the first commercial scale gold mining project in Nigeria, the Segilola Gold Mine in Osun State, through an innovative financing package comprising debt, equity and a stream.