Financing in place for latest phase of Gabon railway modernisation programme

GABON: A €312m financing agreement for Phase III of the Gabon Railway Modernisation & Safety Programme has been signed by railway concessionaire SETRAG, Proparco and the International Finance Corp.

The programme covers the modernisation of the 648 km Transgabonais railway linking the port of Owendo on the Atlantic coast south of Libreville with Franceville in the east of the country. It aims to enhance reliability, safety and capacity, while supporting the diversification of services beyond the mining sector to include passenger trains and general freight.

Infrastructure modernisation

SETRAG is owned by Eramet Comilog (51%), Meridiam (40%), and the Gabonese state (9%). It transports 8.9 million tonnes of freight and 260 000 passengers per year.

Under the concession agreement, the state is responsible for maintaining public infrastructure assets including bridges, hydraulic infrastructure and passenger rolling stock, while SETRAG is responsible for the railway systems including the track and signalling.

As the delegated project owner, SETRAG carries out maintenance and renewal works on behalf of the concessioning authority.

Since the launch of the programme, 457 km of track has been renewed with concrete sleepers, and 186 km relayed with new 60 kg rails.

Financing agreement

The latest agreement includes €225m in new financing and the refinancing of €87m from the previous phases of the programme.

The Gabonese government’s share of the programme is being financed with an additional €173m provided by French development agency AFD and a €30m grant from the European Union’s Global Gateway initiative.

Proparco, the arm of AFD which works with the private sector on sustainable development projects, said the railway contributes approximately 20% of Gabon’s GDP. The line has a critical role in transporting manganese, a mineral for which Gabon is one of the world’s leading producers, and provides a vital economic lifeline in remote and landlocked areas where alternative transport options are limited or unavailable.

Benchmark logistics corridor

‘The successful completion of this financing marks a decisive milestone for both SETRAG and Gabon’, said SETRAG CEO Christian Magni in July.

‘It reflects the confidence our financing partners have in our business model and operational trajectory. With this support, together with the ongoing operational backing of our shareholders, we now have the means to accelerate the safety upgrades and full modernisation of the Trans-Gabon Railway, strengthening its position as a benchmark logistics corridor in central Africa and as a driver of sustainable development for local communities and the national economy.’