GEN signs binding MoU with Chinese giant for EPC and financing

Published 17-APR-2025 10:08 A.M.

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Today, our green iron ore Investment Genmin (ASX: GEN) took a significant step forward in the development of its Baniaka iron ore project in Gabon by signing a binding Memorandum of Understanding (MoU) with Sinohydro Corporation Limited, a subsidiary of PowerChina.

PowerChina is a big, big company - ranked #108 on the Fortune Global 500.

Here are the key points:

Sinohydro will provide a proposal for an engineering, procurement, and construction (EPC) contract for Baniaka.
The big one for us - the Chinese construction giant will assist Genmin in procuring at least US$250 million in funding for the project.
Sinohydro has been granted an exclusivity period to prepare the proposal and negotiate the EPC contract.
The partnership leverages Sinohydro's 10+ years of experience in Gabon, including their work on the Grand Poubara hydroelectricity facility near Baniaka - where GEN has signed a twenty-year supply agreement for clean, renewable energy.

We’re pleased with this development as it provides a solid foundation from which GEN can not only plan ahead to construction, but most importantly, use Sinohydro’s industry connections to secure financing for the project’s CAPEX.

We also note that with the country of Gabon recently completing its election - this should provide some added certainty about the political make-up of the country for potential financiers.

Read our Quick Take on the election: Gabon election complete, is progress on major projects next?

What’s next for GEN?

Project financing update (US$200M CAPEX financing)

We want to see GEN show a pathway to getting its project financed and into construction.

Milestones

🔲 Confirm funding strategy

🔲 Secure debt financing

🔲 Secure equity financing

🔲 Secure binding offtake agreements

🔲 Secure prepayments for offtake or other strategic capital partners.

Convert offtake MoU’s into binding agreements

In the near term we are looking for GEN to make progress across its offtake MoUs.

With 4 non-binding MoUs for offtake already secured, we think GEN will be looking to make these offtakes binding and in doing so, firm up the financing picture.

We expect there would be some competitive tension around GEN’s premium product - and things could move quickly once any of these 4 MoUs are converted into a binding agreement.