Standard Bank, Africa’s largest bank by assets under management, has announced that it is providing the entire debt requirement for project sponsor South African Infrastructure Investment Company (SAIIC) to upgrade the Beitbridge Border Post (BBP) between South Africa and Zimbabwe.
The BBP is a border post and bridge spanning the Limpopo River, which forms the political border between South Africa and Zimbabwe.
Standard Bank says that the Export Credit Insurance Corporation of South Africa will be providing it with 100 percent political risk insurance for the project and 85 percent commercial risk insurance.
The announcement of Standard Bank’s involvement on the debt side follows the earlier news that Old Mutual, the private sector infrastructure investor, would be the lead equity investor to SAIIC for the project, which has a total value of $97 million.
The project aims to follow in the footsteps of the Chirundu border post between Zambia and Zimbabwe which has generated a one-third reduction in transit times through the border post. It currently takes four hours to transit the BBP, which Ziyaad Sarang, Standard Bank’s investment banking head of infrastructure finance, says in a statement can be reduced by 75 percent.
BBP is currently among the busiest border posts in the South Africa Development Community (SADC) economic region, with more than 12,000 travellers and 3,500 vehicles a day at peak times. Annually, this amounts to four million people, one million vehicles and millions of tons of freight.
The project will be procured on a build-operate-transfer (BOT) basis, with the concessionaire solely funding the investment and generating revenues from toll fares charged to travellers and transporters using the upgraded border post infrastructure and related services. The operation aspect of the 15-year concession relates only to maintenance of the border post and not the performance of functions.
The project will see the upgrading of the border post; upgrading of the main access road, increasing it from a single lane to multi-lane; a new weighbridge facility for north and south traffic; and increased staff accommodation.
“The BBP has long been identified as a major bottleneck in the smooth flow of traffic along the North-South Corridor which links South Africa to Zimbabwe, Northern Mozambique, Eastern Botswana, Zambia, the DRC and Malawi,” says Sarang. “Alleviating this bottleneck is an imperative for improved regional economic integration and development.”
The same project sponsors were involved in the New Limpopo Bridge, the oldest BOT project in Southern Africa.