Narrative
Full Description
Project narrative
On May 22, 2014, the African Development Bank (AfDB) and the People's Bank of China (PBOC) signed an agreement for the Africa Growing Together Fund (AGTF) (see Umbrella Record ID#36104). The purpose of this $2 billion loan facility was to finance large development projects in Africa between 2014 and 2024. The AGTF is sponsored by the PBOC and the administered by AfDB. Then, on March 17, 2020, AGTF signed an EUR 44,839,000 loan agreement with the Government of Gabon for the Infrastructure Sector Support Project - Phase I (PASIG-1). On the same day, the African Development Bank’s African Development Fund (AfDB) issued an EUR 92.778 million loan to the Government of Gabon for the same project. The borrowing terms of the AGTF loan are as follows: an 25-year maturity, a 7-year grace period, an interest rate of 6-month EURIBOR plus a 1% margin, a 0.25% commitment fee, and a 0.25% upfront (management) fee. The project consists mainly of: (a) construction and asphalting of the Ndendé-Doussala road section (49 km) and the border bridge over the Ngongo River; (b) construction and asphalting of 21,280 km of roads in Libreville, including related developments (sanitation, street lighting, beautification); and (c) detailed sector and technical studies to feed a substantial pipeline of transformative projects in the road subsector. The project is part of the Trans-Gabonese corridor development scheme expected to link Libreville to Mayumba in the South, and crosses timber, mining, metallurgy, agro-industry, fishing, livestock and ecotourism hubs, among others. However, developing the economic potential in the project impact area, which is limited to Ngounié Province, is currently undermined by the poor state of transport infrastructure. The main expected outcomes include improved logistics chain service on this road axis as well as mobility and living conditions for people in the PIA. The project will reduce travel distances by increasing the access rate to basic services for residents of the PIA. Covering the period 2020-2023, PASIG-1 is structured around five components include, apart from road works on the Ndendé - Doussala section and urban roads, ancillary developments (rural roads and social action) and other measures aimed at better protecting the road infrastructure and facilitating transportation. PASIG-1 was originally scheduled to commence in May 2020 and reach completion in December 2024. The Environmental and Social Impact Assessment (ESIA) certificate of compliance for the project was issued on October 7, 2019 by Gabon’s Ministry of Water, Forestry, Sea and the Environment, responsible for Climate Change and Land Use Planning (MEFME). However, the project encountered implementation delays and did not officially commenced until November 17, 2021.
Staff comments
1. The AfDB project identification number is P-GA-DB0-009. 2. The project’s estimated internal rate of return is estimated at 18.25%. 3. The all-in interest rate (0.634%) was calculated by adding a 1% margin to the average 6-month EURIBOR rate in March 2020 (-0.366%). 4. The margin of 1% is calculated by adding the Funding Cost Margin (unknown) to the Lending Margin (0.8%) and the Maturity Premium (~0.2%). 5. This project is also known as PASIG-I.