Background

The Project consists of the financing and realisation of a major upgrade programme and the operation and maintenance of the Transgabonais railway, under a 30-year concession.

Initiated in 1974, the Transgabonais is a c. 650 km strategic railway connecting the country’s capital and largest city Libreville, the port of Owendo, and Franceville, Gabon’s 3rd largest city and major inland hub. In 2020, the Transgabonais has carried c. 330,000 passengers and c. 9 million tonnes of goods, including c. 90% of the country’s manganese production.

As the only railway available to the industrial sector, the Transgabonais is a key infrastructure for the economic growth and diversification of Gabon. Since 2015, the infrastructure has been subject to a €509m modernization, renovation and upgrade programme (the “PRN”) to restore the initial capacity of
railway (which had dwindled by half over the years) by 2024. In 2021, Setrag and the State agreed to go beyond the PRN with a €197m additional Capex plan (“PRN2”), to further increase the capacity of the line to reach a total of 19 m MT by 2027.

Meridiam is taking an active role in the execution of the ongoing long-term investment plan with the creation in December 2021 of an Investment Committee and the secondment of the Head of Investments. This Investment Committee is dedicated to managing the investment plans (PRN and PRN2), with a focus on delivering on time at adequate level of cost, quality and reliability. Alongside
Meridiam, the project is backed by Comilog, subsidiary of French mining company Eramet, world’s 2nd largest manganese exporter and major client of the line. IFC and Proparco are providing senior debt to Setrag.

Stage

Under Construction / Operation

ESG/SDG Key Facts

No major detrimental environmental and social impact is expected from railway upgrade works, as the Project is brownfield. Safety along some sections of the corridor will be enhanced by the construction of concrete fences both sides of the railway, in particular in the Owendo region (where there is the highest concentration of population) and around train stations.

207 households and business activities were identified as living or working within the legal corridor of the railway (including houses, sheds, restaurants and other small businesses scattered throughout the railway corridor). A Resettlement Action Plan was developed by Setrag (in accordance with IFC Performance Standards) and approved by IFC and Proparco.

Setrag has also developed an Environmental and Social Audit, an Environmental and Social Management Plan, a Resettlement Framework and a Biodiversity Action Plan. The Project Company is focusing on accelerating the implementation of the ESAP.

Setrag benefits from the support of Meridiam and Eramet’s senior E&S Manager towards that objective. An international advisor was mandated in March to contribute to the delivery of the ESAP. The refurbishment of the railways will result in improved safety for passengers and additional traffic in line with the development and diversification of the Gabonese economy.

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Meridiam enters shareholding of Setrag, operator of the Transgabonais railway line in Gabon