China Development Bank provides $46.64 million loan for Lomé Container Terminal Project

Project narrative

In December 2011, Togo’s Ministry of Transport and Ministry of Economy and Finance awarded a project company and special purpose vehicle called Lomé Container Terminal S.A. (LCT) a 35-year concession agreement (franchise agreement) — with an optional 10-year extension — to develop, construct and operate a greenfield transshipment container terminal within the Port of Lomé. LCT was established in December 2008 and it is indirectly wholly owned by Thesar Maritime Limited (TML), wholly-owned by Terminal Investment Limited (TIL), a subsidiary of the Italian-Swiss shipowner Mediterranean Shipping Company (MSC). [Note: In August 2012, China Merchants Holding International (CMHI) through its wholly-owned subsidiary OKL acquired a 50% stake in Thesar Maritime Limited. TIL merged with Global Terminal Limited (GTL) in a reorganization in December 2012; the shareholders of TML (and LCT, by extension) at that time were CMHI via Oasis King International Limited (OKI) and TIL on an equal (50/50) basis. CMHI later transferred 30% stake of OKI to the China Africa Development Fund (CADF), a wholly owned company of China Development Bank (CDB); as a result, CMHI’s effective interest in TML was 35% as of December 31, 2017.] According to the World Bank in 2011, the Lomé Container Terminal Project cost $442 million and was financed according to 75:25 debt-to-equity ratio. In 2011, LCT signed a $331.5 million lending agreement with a group of banks for the project — including the International Finance Corporation (IFC), the African Development Bank (AfDB), the Netherlands Development Finance Company (FMO), German Investment and Development Corporation (DEG), and China Development Bank (CDB) — for the Lomé Container Terminal Project. The International Finance Corporation (IFC) was the sole lead arranger of the debt package. CDB provided a $46.64 million loan for the project; however, the borrowing terms of its loan are unknown. The breakdown of the debt package for the rest of Lomé Container Terminal Project was as follows: the IFC provided a loan of $116 million; the African Development Bank (AfDB) provided a loan of $75.56 million; Germany's KfW provided a loan of $46.64 million. The remaining $110.5 million was provided via equity contributions from the Mediterranean Shipping Company (MSC). However, there were several other financiers for the project unreported by the World Bank. The OPEC Fund for International Development (OFID) provided €30 million EUR (€20 million in 2012, €10 million in 2015) for the project. The Netherlands Development Finance Company (FMO) provided €35 million EUR (€25 million in 2011, €10 million in 2015) for the project. Proparco provided a €30 million EUR loan for the project in 2011. The purpose of the project was to construct three berths — that have a total coastline of 1,050 meters, a water depth of 16.6 meters, and an area of 53 hectares — at the Port of Lomé. Upon completion, the container terminal was expected to have an annual handling capacity of 2.2 million 20-feet container units (TEU). The terminal was designed to accommodate container cargo ships 16.6 m over Panamax size. The planned maximum vessel size that the port could accommodate was 14,000 TEU. The Port of Lomé was one of the few deep-water ports in Western and Central Africa; it served as a shipment hub towards land-locked Mali, Niger, and Burkina Faso, as well as northern Nigeria. The port had an existing capacity of 221,000 TEU on the West African coast because of its ideal location. It also served as a gateway to landlocked Mali, Niger and Burkina Faso, as well as the northern parts of Nigeria. The port’s existing capacity was 221,000 container units; the project, by seeking to expand it, was addressing growing Togolese needs and regional demand for more trade. The Khouri Group Ltd. received a $250 million contract to construct a 300 meter sand barrier, clear the existing landscape, and bank the area with sand with a thickness of about 2,00 meters, compact the terminal surface, build dock walls and foundations for gantries and cranes, open the main jetty at depth and dredge the harbor basin, create a storage area for hazardous material, and construct buildings, fences, electric lines, and a road, rail, and waterways network. Finnish company Konecranes Oyj provided a 22 16-wheel electric rubber tyred gantry (RTG) cranes, with a lifting capacity of 40 tons, for the container terminal. Spanish company Humiclima S.A. was responsible for the installation of the ventilation, air conditioning, plumbing, sewage, and fire systems in the terminal's administrative, customs, and goods receipt offices. German company RMT Industrie- und Elektrotechnik GmbH was responsible for the installation of the design, provision, and installation of the electrical equipment -- emergency generators, MV and LV electricity supply, and lighting and communications equipment -- for the terminal. Project Management International (PMI Ltd.) was contracted by LCT to conduct marine, offshore geotechnical, onshore geotechnical, and marine condition surveys for the project. Staff of Spanish company Ingeomar S.L.P. acted as technical advisors during construction . RBS EMEA UG was contracted to provide its terminal operating system (TOPS) suite, a web frontend, and a KPI tool for the management of the container terminal. Togo's Ministry of Public Works and Transport (now the Ministry of Infrastructure and Transport) supervised the project, while the Autonomous Port of Lomé was responsible for the implementation of construction projects and operation of port infrastructures at the port. MSC, which has a 12% share of the international container shipping market, was expected to serve as LCT’s “anchor customer." LCT was the contractor responsible for implementation. Construction was underway some time before January 23, 2014. LCT put the port into trial operation on October 23, 2014, although some construction continued beyond this point. Most construction had been completed by December 2015. All construction was eventually completed. The port was jointly operated by TIL and CMHI. The container terminal was a boon to the Port of Lomé, which saw an increase the number of containers transiting the port, as of December 31, 2017, container throughput handled by LCT was 0.89 million TEUs compared to 0.53 million TEUs on December 31, 2016, a year-on-year increase of 67.5%. As a result, the Port of Lomé over took the Port of Lagos as the leading port in West Africa. Further expansion of the Lomé Container Terminal, south of the newly constructed port basin, is envisaged in the long term.