SETRAG III

pending

SETRAG (the “Company”), an existing IFC client, operates a 648 km freight and passenger railway with 24 stations in Gabon under a concession expiring in 2045. SETRAG was established in 2003 and is currently 51%-owned by Compagnie Minière de l’Ogooué (COMILOG) (the “Sponsor” or “Guarantor”), a large producer of manganese and part of the French mining and metallurgical company Eramet Group; 40% by Meridiam and 9% by the Government of Gabon (GoG). It is the only railway in Gabon and is transporting 264,000 passengers and 8.9 million tons, of which 8.4 Mt of mining products in 2024. SETRAG initiated a railway modernization program in 2015 (Programme de Remise à Niveau – PRN), with the objective to restore SETRAG’s original transport capacity of 16 trains/day by addressing infrastructure degradation and improving safety. In 2016 IFC, PROPARCO and AFD committed the financing of Phase I (Project #34400) of the rail rehabilitation program and the ESRS and ESAP were disclosed (https://disclosures.ifc.org/project-detail/ESRS/34400/setrag) on 12 May 2015. In 2020, the IFC and Proparco’s loan facility was extended through a Phase II (Project #42222) investment with its ESRS/ESAP disclosed (https://disclosures.ifc.org/project-detail/SII/42222/setrag-ii) on 4 February 2020. Due to the impact of high traffic levels on its infrastructure, SETRAG plans to implement €[704] m of additional investments to achieve the PRN’s capacity objective (the “Project” or “Phase III”), comprising €[501] m of SETRAG-funded works and €[203] m of State-funded works. The current investment comprises an IFC “A” loan, Euro interest rate swap to hedge Phase III debt, and trust loans from MCPP as well as mobilization of funds from DFIs to support Phase III project that allows SETRAG to complete the balance of work on the initial investments by IFC. The main activities include (i) replacement of 324 km of sleepers; ii) replacement of 561 km of rails; iii) building of additional safety barriers and pedestrian overpasses; and iv) upgrades to the traffic management system. To date only 60% of Phase II has been completed and Phase III financing will allow the capacity restoration and upgrade of the railway to achieve 96% of the mainline sleeper’s replacement and 78% of its rails being renewed by mid-2029. SETRAG will contract the rehabilitation works under Phase III to multiple contractors. The rehabilitation works commenced in 2025 and are expected to be completed by 2030.