Sugar Project Financing: NSDC Strikes Partnership Agreement with NEXIM Bank

The National Sugar Development Council (NSDC) and the Nigerian Export-Import Bank (NEXIM Bank) have struck a strategic partnership to pursue long-term, development-oriented financing for the large-scale transformation of the country’s sugar industry.

This was the outcome of a meeting held between the two organisations in Abuja.

The NSDC delegation led by the Executive Secretary/CEO, Mr. Kamar Bakrin, proposed a crucial partnership with the Bank that will use the Engineering, Procurement, Construction plus Financing (EPC+F) model to finance the Council’s viable sugar projects. Under the proposed framework, the NSDC would originate and develop bankable, policy-aligned projects and support equity mobilisation, while NEXIM Bank would anchor capital mobilisation by facilitating access to international Export Credit Agencies (ECAs), coordinating syndication with other Development Finance Institutions (DFIs), supporting foreign input financing, and providing risk-mitigation instruments, including guarantees and commercial risk insurance.

During the engagement, Mr. Bakrin outlined the significant market opportunity within Nigeria and the wider African sugar sector, noting that the Nigerian sugar market is valued at approximately US$2 billion, while the broader African sugar market is estimated at about US$7 billion. He added that sugar by-products have a market that exceeds US$10 billion in Nigeria.

“Nigeria cannot achieve self-sufficiency in sugar production on short-term capital,” Mr. Bakrin said. “What the sector requires is patient, long-tenor financing deployed at scale and backed by policy certainty. By partnering with NEXIM Bank and international export credit partners, we are putting in place a financing architecture that allows serious investors to execute, not speculate.”

Mr. Bakrin further emphasised that Nigeria is well positioned to competitively serve both domestic and regional markets under the African Continental Free Trade Agreement (AfCFTA), provided that long-term, appropriately priced financing is deployed to scale sugarcane cultivation and processing at industrial levels.

He explained that the EPC+F model has already been successfully deployed by the NSDC through an existing partnership with SINOMACH, a leading Chinese engineering and industrial conglomerate. Under this arrangement, financing of up to US$1 billion has been structured at the Secured Overnight Financing Rate (SOFR) plus three per cent, a 15-year tenor and a three-year moratorium, to fast-track the development of large-scale sugar projects in the country.

The model is projected to deliver annual foreign exchange savings of approximately US$300 million through import substitution, create over 50,000 jobs across the sugar value chain, and enable up to 25 per cent import substitution within five to ten years.

The NSDC boss outlined the institutional measures already undertaken to de-risk investment in the sugar sector and enhance execution certainty. These include ongoing efforts to codify the Nigeria Sugar Master Plan (NSMP) into law through amendments to the NSDC Act to guarantee policy continuity and investor protection.

According to the NSDC boss, smuggling and other activities that encourage the influx of cheaper products are being tackled by rigorous enforcement and effective implementation of penalties.

He informed the gathering that large-scale sugar projects are structured to create significant employment across farming, processing, logistics and ancillary services. Outgrower schemes are embedded to integrate smallholder farmers into commercial value chains, enhance rural incomes and promote inclusive growth.

Host community participation, he said, is prioritised through preferential employment, skills development and investments in local infrastructure, healthcare and education, supporting social stability and long-term project viability.

The NSDC boss noted that sugarcane cultivation aligns with environmental sustainability objectives, functioning as a renewable crop and year-round carbon sink.

“The sector supports value-added renewable co-products such as ethanol and bioelectricity, contributing to climate and energy-transition goals. NSDC promotes environmentally responsible production models and sustainable land-use practices, alongside inclusive community and outgrower participation, positioning projects to attract climate-aligned and development-oriented capital.

“Sugar projects are anchored on credible operators with proven technical and financial capacity, with community acceptance and land access treated as gating criteria at early stages of development to enhance execution certainty and long-term bankability,” he sad.

In his response, the Managing Director of NEXIM Bank, Mr. Abba Bello, welcomed the initiative and acknowledged the strategic importance of the sugar industry to Nigeria’s economic diversification, export development and value-chain expansion objectives. He expressed NEXIM Bank’s interest in exploring structured partnerships that would unlock long-term financing, strengthen local value chains and enhance Nigeria’s competitiveness within regional and international markets.

Mr. Bello commended the structured and execution-focused approach being adopted by the NSDC and reaffirmed NEXIM Bank’s commitment to supporting viable export-oriented and import-substitution projects that align with national development priorities.