The African Export-Import Bank (Afreximbank) says it has approved US$70 million to help fund the expansion and upgrade of the Beitbridge border post.
Afreximbank will extend a US$43 million senior term loan facility to Zimborders, the company running the project, and issue an investment guarantee of US$27 million to Phembani Remgro Infrastructure Fund for its investment in Zimborders.
In November, Phembani Remgro and private equity firm Harith General Partners announced they were buying equity in Zimborders, as part of fund raising for the project.
Benedict Oramah, president of Afreximbank, said expanding the Beitbridge border post would cut costs associated with traffic delays and smoothen trade in the Southern Africa region.
“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,” Oramah said in a statement on Wednesday.
Together with Emerging Africa Infrastructure Fund (EAIF), part of the Private Infrastructure Development Group, Afreximbank is one of the mandated lead arrangers and debt lenders on the project, and its US$70 million is part of a US$204.4 million syndicated senior term loan facility.
South Africa’s top four banks, FirstRand, ABSA, Nedbank, Standard Bank of South Africa, are part of the project.
What’s in the project?
The project will see new terminals being built for each vehicle category. They will include new vehicle parking areas and feeder roadways.
New cargo scanning equipment will be installed to allow for faster inspection of cargo. Manual unloading and inspection will also be reduced.
A new ICT system will be installed that will allow for an automated queuing and payment system for truckers. As part of the deal, a new housing development will be built for the town of Beitbridge, as well as facilities for informal traders and other public amenities.
As part of the deal, a new housing development will be built for the town of Beitbridge, as well as facilities for informal traders and other public amenities. Other facilities under the project include a fire station, housing sewer lines, housing electrical supply lines, a reservoir, water pipelines to the reservoir, a wastewater treatment plant and a water pump station.
Zimborders, a consortium of local businesses, was awarded the contract to expand the border post in 2018. The consortium is headed by Glynn Cohen, founder of GDC Whelson Transport. Other Zimborders directors are Francois Diedrechsen, who is CEO, as well as accountant Rugare Pasipamire and Caleb Dengu, development banker and chairman of RioZim Energy.
JSE-listed Raubex is the main contractor on the project.