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US$70m for Beitbridge upgrade

by Staff reporter
05 Mar 2021 at 06:16hrs | Views
THE African Export-Import Bank (AfreximBank) has approved a US$70 million facility to fund the upgrading of the Beitbridge Border Post to enhance smooth trade in Southern Africa.

Situated in Matabeleland South province, Beitbridge Border Post is the busiest inland port of entry in the region. The border post is a critical access point to trading with surrounding countries to the north and its upgrade would significantly reduce waiting periods that have of late hampered human and vehicular traffic movement.

AfreximBank said work to upgrade the port of entry will involve procurement of technical equipment and software and modernising the border facilities to ensure smooth service during the concession period.

This would see investments being made in the border town including development of a fire station, residential accommodation, water pipelines and waste water treatment plant, among other key infrastructure development initiatives.

"AfreximBank has approved US$70 million to finance the expansion and upgrade of the Beitbridge Border Post in Zimbabwe," it said. The institution authorised a US$43 million loan facility to Zimborders Mauritius Ltd and the issuance of an investment guarantee of US$27 million supporting Pembani Remgro Infrastructure Fund to join other investors under Zimborders Mauritius.

The financing facility forms part of a US$204,4 million syndicated senior term loan facility for which AfreximBank was among a consortium of financial institutions acting as mandated lead arrangers and senior debt lenders.

Reflecting on the project, AfreximBank president, Professor Benedict Oramah, said improvement of the Beitbridge Border Post was critical to reducing costs associated with traffic delays, and in turn increasing trade in the Southern Africa region in furtherance of the institution's drive to boost intra African trade.

"It is too costly to wait for almost five days at the border to deliver goods and services across Southern Africa. With this facility, we aim to cut indirect and direct costs of trade associated with border post effectiveness and efficiency," he said.

Current estimates by Trademark Southern Africa (TMSA) indicate that a truck takes about five days to be cleared at the border post, creating additional "dead-weight" transport costs for importers.

Against this background, it is hoped that the approval of the loan facility and investment guarantee to upgrade the border post will greatly reduce waiting times and improve its operational efficiency and effectiveness.

The Beitbridge Border Post upgrade project, which is a public-private partnership, is the first of its kind in Zimbabwe.  It is funded by African financial institutions that have come together to provide commitments in the syndicated senior term loan facility.

Other participating financial institutions include the FirstRand Bank Limited, ABSA Limited, Nedbank Limited, Standard Bank of South Africa and The Emerging Africa Infrastructure Fund.

Source - the herald

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