Tunis — 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 goal is to contribute to the growth of the Egyptian economy through the development of maritime transport at the international level. The project consists of:
* 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 important development impacts. The first direct impact will be 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 the Egyptian staff. The injection of permanent wages and revenues into the economy will boost Egypt's national income.
Damietta container terminal will offer an excellent opportunity for other African countries close to Egypt that are not endowed with such infrastructures to export and imports commodities. This will enhance the competitiveness of regional trade and reinforce regional cooperation.
The project will be financed by USD 200 million of equity from the sponsors and USD 480 million of senior debt provided by the ADB and two leading Middle Eastern 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 53 regional member countries.
The ADB Group began operations in Egypt in 1974. To date, its commitments in the country stand at US$ 2.65 billion in 50 operations.