By: Creamer media

Yellowstone, a South African group that won a 20-year concession to design, build and operate the dry port, will raise debt with top South African lenders such as Standard Bank Group and Nedbank Group. Others including Ninety One and Africa Export-Import Bank will also participate in the deal that comprises 77.5% debt, project head Francois Diedrechsen said.

The parties have signed a concession pact, with due diligence and full financial closure is expected to be completed by the end of July, he said in an interview.

“It will work on a user-pay principle that services the debt and equity and there is a royalty split between 7% to 15% to the government depending on the level of revenue a month,” he added.

With increasing global trade tensions, more African funders are starting to invest in projects. Deals such as these will facilitate more intra-African trade, he said.

Nedbank and Afrexim declined to comment, while Standard Bank and NinetyOne didn’t immediately respond to requests.

Mineral corridor 

The new dry port will clear 1 500 trucks a day, transporting minerals such as copper and cobalt through Zambia to South Africa’s port of Durban, or the facility in Mozambique’s capital, Maputo. It’s expected to slash truck-clearance times across the Kasumbalesa border to four hours from six days, he said.

“There is a movement in the Southern African Development Community in cleaning up the border posts to get trade in the region to move more freely,” said Diedrechsen, who was also involved in the upgrades of the Beit Bridge border between Zimbabwe and South Africa.

The US is also spending billions of dollars on an alternative route for minerals leaving Congo for the US. The Lobito corridor connects mining regions through a 1 300 km railway to an Atlantic port in Angola.

On the other hand, China — which controls the processing of a majority of the country’s copper and cobalt — uses the Indian Ocean. It’s also building dry ports and key road and rail infrastructure to ease logistics.