On December 5, 2024, Afreximbank, the African Export-Import Bank, and Dorman Long Engineering Limited, a prominent engineering firm, announced a significant deal aimed at boosting the steel and energy sectors across Africa. Under the terms of the agreement, Afreximbank has provided Dorman Long Engineering with a $10 million revolving trade finance facility. This funding will be used to facilitate the importation of steel pipes required for threading, a critical component in the oil and gas sector.
The deal was signed on the sidelines of the recently concluded African Energy Week in South Africa. It forms part of Afreximbank's larger initiative to enhance the technical and financial capacities of African Engineering, Procurement, and Construction (EPC) companies. Known as the Intra-African Engineering, Procurement, and Construction Initiative, this program aims to help African firms compete for large infrastructure projects across the continent, positioning them for greater participation in the global market. The trade finance facility is structured with a three-year tenure, which will provide much-needed liquidity to Dorman Long Engineering as it works to supply steel pipes to international oil companies.
In practice, the $10 million facility will enable Dorman Long Engineering to issue letters of credit and standby letters of credit. These financial instruments will help the company import the necessary steel pipes from international suppliers and ensure a smooth supply chain for local and regional oil and gas operations. The partnership is expected to play a crucial role in overcoming some of the barriers that limit Africa's share of global export services, particularly in the energy sector.
This agreement also positions Dorman Long Engineering to expand its operations beyond Nigeria, where the company is based, into other African nations. The financing will allow the company to serve a broader range of clients in Africa, strengthening the continent's infrastructure and energy capabilities. The steel pipes, imported using the funds, are essential for oil exploration and production, as well as for maintaining and enhancing pipeline infrastructure.
Afreximbank’s commitment to facilitating such projects underscores its role in supporting African enterprises and improving trade relations within the continent. The bank has been a driving force in financing large-scale trade transactions across Africa, and this deal is another example of how it is helping local companies gain access to international markets. With a focus on enhancing intra-African trade, Afreximbank’s support for Dorman Long Engineering is part of a broader effort to create a more robust and self-sustaining African economy.
The partnership also addresses a gap in the African EPC sector, where firms have often struggled with access to capital and the ability to compete for large projects. By providing the financial backing needed to import critical materials, Afreximbank is enabling Dorman Long Engineering to build the capacity required to take on major projects and compete with global players in the energy and infrastructure sectors. This aligns with Afreximbank’s broader vision of supporting African businesses as they grow and expand their reach.
The deal highlights the increasing importance of collaboration between African financial institutions and local businesses in driving economic growth. It is a positive sign for the future of African manufacturing and trade, as well as the broader oil and gas industry. By ensuring that African EPC companies can access the resources they need to thrive, Afreximbank is helping to lay the foundation for sustainable economic development on the continent.
As Africa continues to expand its energy and industrial sectors, partnerships like the one between Afreximbank and Dorman Long Engineering will be key to ensuring the continent’s long-term success. This deal marks a significant milestone for both organizations and sets the stage for further collaboration aimed at enhancing Africa’s position in the global economy.
