| Project Detail |
Portos e Caminhos de Ferro de Moçambique EP (“CFM”) the rail and port authority of Mozambique, is a Public Enterprise (“PE”) that oversees the railway system of Mozambique and its connected ports. CFM has approached the African Development Bank (“the Bank”) to contribute to the financing of its Strategic Plan (“thePlan”) for the period 2021 to 2024. The Plan entails a total investment of USD 978.7 million comprising of the capacity development of the ports (USD 469.4 million) and railways (USD 509.3 million). Of the USD 509.3 million investment for the railways, USD 136.9 million is earmarked for the acquisition of rolling-stock. The Bank has been requested to finance a portion of the rolling stock component with a senior corporate loan of up to USD 70 million (“the Facility”) to support CFM’s acquisition of rolling-stock for its major corridor, the Ressano Garcia Railway Line (“theProject”).
Project Objectives
The Project is rated Excellent for development outcomes mainly stemming from (i) Private sector developmentthrough enhanced domestic linkages, enterprise price, and user effects and (ii) Integration and resiliencethrough improved transport connectivity within and between the country and neighboring countries, and intra-African trade of services. The likelihood of achieving development outcomes in a timely manner is assessed as High, supported by the positive track record of CFM and the substantial experience of the management team in deploying and managing similar projects. The development context is assessed as Highly constrained, given that Mozambique is a transition state where the fragility effects are more pronounced.
Beneficiaries
Mozambique, strategically positioned in the Southern Africa region, is arguably the primary logistics gateway for hinterland countries such as Zimbabwe, Zambia, Malawi, and Eswatini. The country’s threeprimary corridorsprovide comparatively shorter corridor options. The road and railway systems that are used for transporting freight from neighboring countries gives them access to global markets for exports and imports. The main commodities transported along the corridorscomprise of raw and processed minerals, agriculture products, containerized freight, and bulk liquids. The Ressano Garcia Line services the Maputo corridor, which the targeted rolling stock will be deployed, is used mostly for the export of mineral products(bulk magnetite, ferro-chrome, chrome ore and coal)from South Africa’s north easterly mining belt through the port of Maputo, which provides the shortest access to a seaport. With upgraded development and the efficient operation of the corridor, the potential to expand the corridor to transport mining products destined for exports from countries in the North -South Corridor, including the DRC, is extremely high. The RessanoGarcia Line (CFM-S on the Maputo Corridor) and the Sena Line (CFM-C on the Beira Corridor) are the key rail lines generating significant revenues for CFM. The Maputo Corridor currently carries over 1,600 heavy vehicles per day, and accounts for about 30MTPA of freight. Whilst the GDP growth rate of the feeder countries to the corridor over the past 5-10 years has remained low at less than 2%, traffic growth on the other hand has been nearly twice, at around 5%, and is expected to average 4% over the next 20-30 years. |
