Egypt: USD 150 Million Loan to Damietta Container Terminal
Tunis, 5 December 2007 – The Board of Directors of the African Development Bank (AfDB) Group approved on Tuesday in Tunis, a USD 150 million loan to finance the Damietta container terminal situated on Egypt’s Mediterranean coast.
The project’s objective is to contribute to the country’s economic growth of the Egyptian economy through the development of maritime transport at the international level. The project comprises the:
- Construction of quay walls;
- Dredging of the access channel and turning basin;
- Installation of the modern transshipment equipment; and
- Development of the terminal area and container yard.
The port currently handles exports of agricultural products, fertilizers and furniture as well as imported goods such as petrochemicals, cement, grains, flour and general cargo. It handles a total capacity of about 5.6 million tonnes annually. The existing facilities are unable to serve the potential demand of 4.5 million twenty-foot Container Equivalent Units (TEUs).
The project will have direct impact on the economy with the creation of 1,600 permanent direct local jobs. Another benefit of the project will be the transfer of technology since the operators of the port will provide training in modern port practices to Egyptian workers.
Damietta container terminal will offer an excellent opportunity for other African countries close to Egypt that are not endowed with such infrastructure to export and import commodities. This will enhance the competitiveness of regional trade and reinforce regional cooperation.
The project will be financed with a USD 200 million equity from the sponsors and a USD 480 million senior debt provided by the AfDB and two leading Middle East commercial banks, the Ahli United Bank (AUB) and Arab Banking Corporation (ABC).
The project is in line with the Bank’s country strategy for Egypt for the period 2007-2011, which focuses on supporting infrastructure development, trade, and economic growth. As a public-private infrastructure project, Damietta is perfectly aligned with the Bank’s updated private sector development (PSD) strategy.
In November 2006, the AfDB supported comprehensive structural and financial reforms initiated by the government of Egypt with a loan of US$ 500 million, the highest amount ever approved by the institution for any of its regional member countries.
The AfDB Group began operations in Egypt in 1974. To date, its commitments in the country stand at US$ 2.65 billion in 50 operations.