A finance package of U.S. $ 865 Million has been closed by the Ethiopian government for the purpose of funding some of the nation’s railway infrastructure.

The fund is going to be used for the construction of part of the National Railway Network, Awash-Weldia/Hara Gebeya Railway Project.

The project is being carried out by the Ethiopian Railways Corporation and it is going to be built in the coming three years stretching from the city of Awash to Woldeya.

According to Reuters part of the package, U.S. $ 450 Million of seven year commercial loan, is from a group of lenders in Europe, Africa, the Middle East and the US, and pays 375 basis points over Libor.

A 13 year loan of U.S. $ 415 Million is also part of the loan and is backed by the Swedish Export Credit Guarantee Board (EKN), Eksport Kredit Fonden (EKF) and Swiss Export Risk Insurance (SERV) export credit agencies.

The contractor, designer and constructor of the project is the Turkish company Yapi Merkezi Insaat ve Sanayi AS.

It was Credit Suisse that served as the coordinating commercial facility arranger and export credit agency lead arranger. Reuters also noted some of the loan has already been disbursed.

Other lead arrangers were Deutsche Bank, ING Bank and KfW IPEX-Bank who took the task for EKF, EKN and SERV respectively. Tranche U.S. $ 181 Million was committed by EKF for ECA’s portion, while SERV and EKN committed U.S. $ 151 Million and U.S. $ 83 Million respectively.

For Turkish goods and services that will be under the same project, Turk Eximbank extended a parallel financing of U.S. $ 300 Million.

It was under the OECD Common Approaches for Officially-Supported Export Credits and Environmental and Social Due Diligence that the financing was arranged. The Common Approach dictates members of OECD should take into account environmental and social impacts to get
official supported export credit.

Source: Reuters