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Equatorial Guinea | ETC provides its guarantee to BDEAC to finance the Harineras Bioko flour mill




EUR 3.4 million


EUR 14.8 million


On November 20, 2022, African countries celebrated the 33rd World Day for the Industrialization of Africa.

Theme dear to the leaders of the guarantee institution ETC-Export Trading & CooperationAnco Marzio LENARDON – President, Enrico MAZZON – Vice-President and Jean-Gauthier GAMBOR – Regional Director, for whom industrialization is one of the first levers development of the continent.

Indeed, since its creation about ten years ago, ETC has constantly supported initiatives promoting the establishment of factories and other manufacturing sites on African territory. The recent operation carried out alongside the Development Bank of Central African States (BDEAC) to cover an investment by the company Harineras Bioko in its flour mill in Equatorial Guinea bears witness to this.


150,000 tons of wheat flour are imported into Equatorial Guinea every year.

Like many African countries, Equatorial Guinea is currently entirely dependent on imports of wheat flour on its soil.
According to our estimates, nearly 150,000 tons of wheat flour are consumed each year by local populations as part of their daily diet.


The challenges of local flour production for Equatorial Guinea:

1. Reduce food dependence

The country, as we mentioned above, is currently highly dependent on imports of food products in general and wheat flour in particular. In the event of a break in the supply chain, the verdict would be final. It would be 1,505,651 Equatorial Guineans who would find themselves, exposed to a shortage of this commodity and the upheaval of their eating habits.

2. Optimization of the trade balance

In 2021, Equatorial Guinea’s trade balance posted a level of €2,682.2 million, i.e. a coverage rate of 264.55%. The trade balance then represented 25.87% of the country’s GDP.
But despite the upheavals of this past year, it should be noted that this indicator has slowed down over the past 10 years, on the one hand, and the preponderance of hydrocarbons in these figures, on the other.

Table 1: Equatorial Guinea – Trade balance | Sources


3. Economic diversification

The pre-eminence of hydrocarbons in Equatorial Guinea’s GDP makes it vulnerable to the vagaries of the price of a barrel.
A diversification of the country’s sources of income is essential, as recommended by the IMF.
Indeed, although, counting on a 6% increase in its GDP in 2022, it should not be forgotten that the country is emerging from several years of recession due to the fall in the price of hydrocarbons.


Flour made in Equatorial Guinea by Harineras Bioko

It was in 2020 that Harineras Bioko celebrated the laying of the first stone of its bread flour factory in Malabo.
On a global project of 7.4 billion CFA francs, the banks are contributing 4.8 billion. The balance having been constituted by the group of shareholders.


25% of wheat flour consumption is now produced in Equatorial Guinea.

The company envisages an annual production of 36,000 tons of wheat flour. It is the equivalent of 3 months of the annual consumption of Equatorial Guineans and Equatorial Guineans which, from now on, will be produced on site.


200 new jobs created

Harineras Bioko also plans to create 200 jobs in the sector.
Among these jobs, a majority of the management will be trained in Spain in order to ensure the transfer of skills necessary for exemplary quality in flour milling.


Decrease in the price of flour for households

With inflation estimated at 4% in 2022 for Equatorial Guinea, such an initiative helps to balance the household basket, thus restoring purchasing power.
Indeed, the fact of now producing wheat flour locally makes it possible to reduce costs, thus relieving the local population.


The partnership between the 3 entities

The financing of this project will have gone through two phases in its development.


The initial loan guarantee

The BDEAC, represented at the time by its former President, Mr. Fortunato – OFA MBO NCHAMA, had in 2020 granted a first syndicated loan with a banking pool of around 11 million euros. This loan already benefited from ETC coverage through the investment guarantee called Project Finance Bond (PFB), up to EUR 1.5 million.


The additional loan guarantee

ETC was able to cover an additional loan of EUR 3.8 million by issuing an additional PFB of EUR 1.9 million in favor of BDEAC on behalf of the company Harineras Bioko, represented by its Managing Director, Mr. Juan NGUEMA ONDO NCHAMA.


Why did BDEAC choose the ETC Project Finance Bond?

The ideal instrument to mitigate the risk of payment default.

The Project Finance Bond (PFB) is an investment guarantee offered by ETC – Export Trading & Cooperation which, thanks to a cover, allows banks and other financial institutions to mitigate the risk of default on payment linked to the repayment of medium and long-term loans. terms granted for the benefit of investments of an industrial nature.


The stand-by letter of credit: a multifunctional instrument

The instrument used for this is the stand-by letter of credit, which is suitable for both an individual guarantee need and a portfolio guarantee need.


ETC benefits from a public rating

ETC is rated A3- (“low” risk category 2) with the European Securities and Markets Authority (ESMA) by an External Credit Assessment Agency (ECAI). To this end, according to the correspondence table, the credit risk weighting applicable to ETC in Euro is 50% (see official rating published on the ESMA website).


ETC, an active member of the SWIFT network

ETC “Export Trading Cooperation” is an active member of SWIFT (Society for Worldwide Interbank Financial Telecommunication) under category 2 called NOSU (Non Supervised Entity active in financial industry), with its BIC (Business Identifier Code) ETCGIT2T.
This gives it the opportunity to provide assistance to FIs (Financial Institutions) and DFIs (Development Financial Institutions) according to the specific criteria of its Swift category.


A commitment by signature

ETC’s hedging instrument is the autonomous guarantee, materialized via Swift MT760 interbank financial message in accordance with the standards of the International Chamber of Commerce (ICC). It represents a commitment by signature which is equivalent to a direct, irrevocable and unconditional claim.


ETC is committed

ETC works as much as possible in support of the 17 United Nations goals within the framework of the 2030 Agenda for Sustainable Development.
Alongside BDEAC and Harineras Bioko, ETC wishes to contribute significantly to responsible growth and financial inclusion in Equatorial Guinea.

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Equatorial Guinea | ETC provides its guarantee to BDEAC to finance the Harineras Bioko flour mill

ETC was able to cover an additional loan of EUR 3.8 million by issuing an additional PFB of EUR 1.9 million in favor of BDEAC on behalf of the company Harineras Bioko.