Project Description
On June 30, 2023, the Multilateral Investment Guarantee Agency (MIGA) issued guarantees in the amount of EUR61.0 million with a tenor of up to 15 years to cover the equity and quasi-equity investments by Meridiam Infrastructure Africa Fund II SLP & Meridiam Infrastructure Africa Parallel Fund II SLP (together, Meridiam) into Société d’Exploitation du Transgabonais (SETRAG). (Please refer to the original Summary of Proposed Guarantee here and the Project Brief here.) The guarantees cover the risks of transfer restriction & inconvertibility, expropriation, war and civil disturbance and breach of contract. The Project consists of the rehabilitation, upgrade, and operation of the Transgabonais railway line aimed at improving the reliability and availability of the railway line by enhancing operational performance, safety and overall quality of service of the railway corridor (the Project). The railway corridor was built over a decade-long period and commissioned in 1986 to transport mining products (manganese ore, etc.), general freight, and passengers. SETRAG is a limited liability company incorporated in Gabon to serve as the concessionaire of the 648 km Transgabonais railway corridor under an initial 30-year concession agreement entered into in 2005 and subsequently extended by 10 years.
MIGA’s guarantees originally covered Phase II of the Project (2020 – 2024) which included (i) upgrading of the railway superstructure, (ii) manufacturing and installation of concrete sleepers, (iii) installation of new traffic operational and safety systems, and (iv) implementation of Environmental & Social (E&S) measures.More recently, Phase III of the Project (2025 – 2029) has been introduced, which includes, the continuation of the (i) the upgrade of railway superstructure, (ii) the upgrade of traffic operational and safety systems and (iii) the implementation of E&S measures. The goal of the rehabilitation plan is to restore the railway’s design transport capacity to 16 train pairs per day.
In December 2024, MIGA amended the contracts of guarantee to increase exposure by EUR 30.7 million, reflecting the investor’s quasi‑equity injection into the Project.
To facilitate Phase III of the Project, which involves further quasi-equity investments by Meridiam, the investor requested MIGA to amend the existing contract of guarantee to increase its exposure to up to EUR152.9 million.
Environmental Categorization
In accordance with MIGA’s Policy on Environmental and Social Sustainability (2013), the Project has been recategorized from B to A based on an updated assessment of the scale and scope of potential adverse E&S risks and impacts. Click HERE to view the IFC Environmental & Social Review Summary prepared for the Project.
Development Impact
The Project will help accelerate the roll-out and delivery of Phase III of the Plan de Remise à Niveau, a major rehabilitation and upgrade program of the Transgabonais railway corridor aimed at improving the availability and reliability of the railway line, a critical artery supporting Gabon’s access to international markets and the competitiveness of the country’s export sector.
MIGA’s proposed coverage to Meridiam is aligned with the World Bank Group’s (WBG) strategy for Gabon. It also meets MIGA’s FY2021-23 Strategy’s emphasis on catalyzing and mobilizing private capital to help achieve the WBG twin goals.
