Beira Corridor Project
- Southern Africa
- Grant Amount
- EUR 29,000,000.00
- Total project cost
- EUR 190,000,000
- PFG Lead Financier
- PFG co-Financier
The aim of the Beira project is the rehabilitation of the transport infrastructure of the Beira corridor in Mozambique, including the rehabilitation of the Sena railway line and the restoration of the Beira port access channel to its original specification. The total project costs are estimated at EUR 188.5m and are being co-financed by loans from the EIB, the World Bank’s IDA, the Beira Railway Company (Companhia dos Caminhos de Ferro da Beira), the Mozambique Ports and Railways (Portos e Caminhos de Ferro de Moçambique), the Danish Development Agency (Danida) and by a grant from The Netherlands through ORET (the Development-Related Export Transactions Programme of the Directorate-General for International Cooperation of the Dutch Ministry of Foreign Affairs).
The port component of the project was completed in July 2011 (i.e. after 11 months). At the end of the project, a total of 9,468,412 m3 had been dredged, including paid over-dredging, as compared to the contract’s estimate of 7,919,000 m3. Since the final dredging works contract value was slightly reduced from the original planned value due to better than expected fuel prices, a balance of EUR 3.2m still remained unutilised under the EIB loan. In 2012, the Borrower requested, and the EIB agreed, to amend the Finance Contract to allow the promoter to utilise the remaining funds for associated further minor port improvements through the purchase of illuminated buoys for the channel, navigation equipment and the renovation of one of the port quaysides. Thus, the balance cas disbursed in April 2016 and the renovation of the port quayside is considered substantially completed since November 2016.
The implementation of the railway was delayed by 12 months. Due to the Conceding Authority’s perception of the low quality of overall implementation, the Authority unilaterally issued a termination notice with a request that Companhia Dos Caminhos De Ferro Da Beira (CCFB) transfers back the assets to the State on 19/09/2011. The termination process took one year from the first intention notice to the final handover of assets. Following the termination of the Concession, Portos e Caminhos de Ferro de Moçambique (CFM) took over the line and has been running it since September 2011. Passenger service is running, as well as various freight services. EIB loan balance and relative IRS was cancelled in October 2014 for the Rail Component.
The EU-AITF IRS grant is being used to subsidise the interest payable by the Republic of Mozambique under the two EIB loans.The subsidised interest rate is 1.8% p.a. for the financing of the Rail Component (loan of EUR 42 million) and 2% p.a. for the Port Component (loan of EUR 23 million).