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ABIDJAN, Ivory Coast, December 13, 2023/ — The Board of Directors of the African Development Bank Group (www.AfDB.org) has approved various financing structures valued at $696.41 million for Burundi and Tanzania to start Phase II of the Joint Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project.
The Bank Group’s financing is intended to construct 651 kilometers on the Tanzania-Burundi railway line. The work will consist of the development of a single electrified standard gauge track. This will be subdivided into three lots: Tabora – Kigoma (411 km) and Uvinza – Malagarasi (156 km) sections in Tanzania; and the Malagarasi –Musongati section (84 km) in Burundi. This standard gauge railway project will be connected to the existing railway network of Tanzania, providing access to the port of Dar es Salaam. In total, 400 kilometers of rail infrastructure has already been built in Tanzania from Dar es Salaam to Dodoma since the start of the first phase of the project. The rest of the section from Dodoma to Tabora is under construction.
The Bank Group will provide $98.62 million to Burundi in the form of grants and $597.79 million to Tanzania in the form of loans and guarantees. As the Initial Mandate Lead Arranger (IMLA), the Bank will structure and mobilize financing of up to $3.2 billion from commercial banks, Development Financial Institutions (DFIs), Export Credit Agencies (ECAs) and institutional investors The total cost of the project both in Tanzania and Burundi is estimated at nearly $3.93 billion. Access to an efficient cost-effective long-haul bulk transport service through the SGR will incentivize large-scale mining and commercial agriculture. It will transform the Central Transport Corridor to an economic corridor by enhancing trade and manufacturing opportunities along the corridor influence zone, and provide for a shift from road trucking transportation, which causes accidents and high road maintenance cost. The SGR railway network will unlock and connect key economic processing zones, industrial parks, Inland Container Depot (ICDs), and population centers along the central corridor. This will enhance accessibility and promote economic activities. This project will contribute to building resilience by supporting the creation and development of institutions that will manage the new railway sector in Burundi and supporting capacity building through skills training in both countries.
This project is a priority for not only the East African Community (EAC) Rail Master Plan, but the African Union’s Program for Infrastructure Development in Africa (PIDA) and will facilitate economic and social transformation in both countries and in the region. The construction of this railway will allow Burundi to intensify the exploitation of nickel, of which the country has the 10th largest deposit in the world in the Musongati mining fields. The country also has resources such as lithium and cobalt, which are expected to generate significant revenue for the country through the rail link with the port of Dar es Salaam which currently accounts for 80% of the country’s import and export trade. This will add value to the national GDP and allow Burundi to have additional resources to accelerate its social and economic development. The project is aligned with the Bank’s Ten-Year Strategy and two of its operational priorities, the “High 5”, “Integrate Africa” and “Industrialize Africa”. It is also in line with the Regional Integration Strategy Paper of the Bank for East Africa (2023-2027) and the Bank’s Country Strategy Papers (CSPs) for Tanzania (2021-2025) (https://apo-opa.co/3Nowna1) and Burundi (https://apo-opa.co/41jr2Xm) (2019-2023). Distributed by APO Group on behalf of African Development Bank Group (AfDB).
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Category: Infrastructure
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African Development Bank approves $696.41 million of financing for Burundi and Tanzania to build 650 kilometers of rail infrastructure to develop the Central Corridor network
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Africa Finance Corporation exits stake in Ghana’s Takoradi Port to Yilport Holding
LAGOS, Nigeria, November 2, 2023/ — Africa Finance Corporation (AFC) (www.AfricaFC.org), the continent’s leading infrastructure solutions provider, has exited its 35% equity investment in Atlantic Terminal Services Limited (ATSL), the concessionaire for the expansion of Ghana’s Takoradi Port, to the global ports and container terminals operator Yilport Holding. This is testament to the Corporation’s ability to attract international 3rd party capital and exit strategic infrastructure assets built by derisking through AFC’s unique project development and construction offering.
In 2019, AFC committed to invest up to US$138 million in equity and debt for the Takoradi Port Expansion Project. The project, which is approaching the operational phase, reduces the cost of imports and exports to and from the western and central regions of Ghana and neighbouring landlocked countries by modernising a container and multipurpose terminal under a 25-year concession for its design, engineering, financing and construction. Through this transaction, AFC exits its shareholding, while Ibistek and Ghana Ports & Harbours Authority remain as shareholders in the project. AFC will continue to be lender to the project, fully committing to ensuring its success.
A vital seaport in Ghana’s Western Region, Takoradi plays a crucial role in the nation’s economic growth and regional connectivity. It offers shorter and less-congested links to west and central Ghana, including the Takoradi region, which boasts of substantial agricultural activity including 50% of Ghana’s cocoa production, as well as manufacturing, industrial and business parks, and a growing natural resources sector. The port is also well suited to provide linkages to neighbouring landlocked countries. The project forms part of the country’s national development plan to revitalize and industrialize the western region and enhance Ghana’s overall efficiency and competitiveness by reducing the cost of imports and exports, building local capacity and generating direct employment opportunities.
Samaila Zubairu, President & CEO of Africa Finance Corporation said, “This exit marks a significant milestone for AFC’s impact on the continent and we take pride in our pivotal role in driving the implementation and de-risking of the Takoradi Port Expansion. The project is reshaping West Africa’s economic landscape and partnering with a reputable investor like Yilport Holding aligns with our mandate to catalyse the inflow of global investment into Africa to transform supply chains, create local jobs and enable resource beneficiation.”
Yilport Holding, a subsidiary of Amsterdam and Istanbul-based Yildirim Group, has been building world-class, multipurpose port facilities since 2004, with a target to become a top 10 global port operator by 2030. Investment in Takoradi represents an ideal entry point into Africa for Yilport, which plans to transform the port and its adjacent area into a logistics and trading hub, ensuring high volumes of traffic.
“The acquisition of a stake in the Atlantic Terminal Services through AFC’s valued partnership marks a momentous occasion for Yilport Holding,” said Robert Yuksel Yildirim, Chairman and CEO of Yilport Holding. “This serves as a strategic gateway for us to establish our presence in the African market, and it aligns seamlessly with our commitment to fostering world-class logistics and trading hubs on an international scale.”
AFC is focused on developing long term infrastructure solutions that improve the resilience and sustainability of cost-efficient supply chain logistics. In the past year, the Corporation has completed construction of two new ports, Terminal à Conteneurs De Nouakchott (TCN) and the San Pedro (TIPSP) Multipurpose Industrial Terminal in Côte d’Ivoire.
Distributed by APO Group on behalf of Africa Finance Corporation (AFC).