SETRAG

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The proposed investment is an A loan of up to EUR 82 million to Société d’Exploitation du Transgabonais (“Setrag” or the “Company”) for its 2015-2022 capital expenditure program (the “Project”). Total project cost for the next eight years is estimated at ~€330 million. Setrag, operator of the Transgabonais railroad (which construction started in 1973), was established in 2003. The management contract awarded to Setrag was expanded into a 30-year concession contract starting in November 2005. Setrag is 99%-owned by Compagnie Minière de l’Ogooué (Comilog), the second largest producer of manganese in the world with circa 15% of the world’s production and part of Eramet group, a French mining and metallurgical company. It operates the Moanda mining site in the Haut-Ogooué province of Gabon as well as the Transgabonais through its subsidiary Setrag. Comilog is not considered an associated facility to this project under IFC PS 1 as both the railway and mine already exist and because the railway deals with commercial goods and passengers in addition to mine output.Funds are intended to support rehabilitation of the existing infrastructure (replacement of approximately 600 km of rails and sleepers); acquisition of new rolling stock for replacement and expansion of transport capacity; refurbishment of railway stations, unstable zones, bridges and worker accommodations (approximately 300 houses); drainage improvement along the corridor; building of new signage and improvement of level crossings. Most of the works will be completed by 2022, whilst maintenance will continue until 2035. This project is confined to the existing railway corridor, i.e. a safety corridor stretching 15 m on either side of the existing railway tracks plus land already acquired for other existing infrastructure, and will not result in any new footprint or habitat fragmentation. The legal right of way for the railway extends 40 m on either side of the centerline of the tracks, but due to potential social impacts on encroachers and presence of sensitive habitat in the National Park section, it has been decided to restrict the works area to the more restricted safety corridor.In the next 5 years, there will be an increase in freight transport from 1 million tons to 1.6 million tons including a slight increase in fuel transport (10%). No major increase in manganese transport from Comilog is expected although the Ndjolé mine operated by Chinese company CITIC Dameng and the Franceville mine currently developed by New Gabon Mining will increase their manganese transport respectively from 360,000 to 500,000 tons and from 75,000 to 360,000 tons. No increase in the number of passengers train is expected.