IFC, a member of the World Bank Group, has agreed to provide €52.5m ($58m) of debt financing to boost the capacity and improve the efficiency of Gabon’s rail network.
The IFC-arranged financing includes a €35m loan for IFC’s account, €17.5m from IFC’s Managed Co-Lending Portfolio Program, and a €32.5m euro parallel loan from Proparco, the private sector financing arm of the French Development Agency.
The financing was awarded to Société d’Exploitation du Transgabonais (SETRAG), which has been the concessionaire of the 650-kilometer Transgabonais rail line between Franceville and Libreville since 2005.
The Transgabonais serves Gabon’s main central economic corridor and helps connect the country’s landlocked iron ore and manganese mines to international markets.
“We are pleased to have provided both advisory services and financing for the rehabilitation of the Transgabonais. This project will support efficient transport solutions by private sector operators for mining companies and general freight shippers, thus facilitating industrial investment and economic growth in Gabon,” said Vera Songwe, IFC’s Regional Director for West and Central Africa.
SETRAG will use the funds to increase the railway’s transport capacity while also improving its reliability.
“SETRAG is very appreciative of the support provided by IFC during the advisory and financing phases of this transaction. IFC’s unparalleled expertise in transport in sub-Saharan Africa and IFC’s ability to play an honest broker role during negotiations of the amended concession contract with the Government of Gabon have been of great added value for SETRAG,” said Patrick Claes, Managing Director of SETRAG.