(Adds details of ECA financing, banker's quote)
By Sandrine Bradley
LONDON Oct 27 The Ethiopian government has
closed a $865 million financing package that funds the
development of some of the country's railway infrastructure.
The proceeds of the financing will be used to build the
Awash-Weldia/Hara Gebeya Railway Project, one of the key railway
corridors that will form part of the National Railway Network of
The financing is split between a $450 million seven-year
commercial loan, which includes a syndicate of lenders from
Europe, Africa, the Middle East and the US, and pays 375 basis
points over Libor.
A $415 million 13-year loan backed by the Swedish Export
Credit Guarantee Board (EKN), Eksport Kredit Fonden (EKF) and
Swiss Export Risk Insurance (SERV) export credit agencies is
Credit Suisse acted as co-ordinating commercial facility
arranger and export credit agency facility lead arranger. Some
of the loans have already been disbursed.
In addition to Credit Suisse, the mandated lead arrangers
for the EKF, EKN and SERV backed facilities are Deutsche Bank,
ING Bank and KfW IPEX-Bank, respectively.
EKF committed $181 million to the ECA tranche, SERV
committed $151 million and EKN committed $83 million.
Turk Eximbank provided a parallel financing of $300 million
for the Turkish goods and services under the same project.
"This is a huge financing for Ethiopia, it is the first
commercial deal of this size we have seen. Banks have a growing
appetite for the Ethiopian market and we expect to see more
deals like this," one banker on the deal said.
This project is being undertaken by the Ethiopian Railways
Corporation. It will be built in the next three years and will
run between the Ethiopian towns of Awash and Weldia.
Yapi Merkezi Insaat ve Sanayi AS, a Turkish company, is the
appointed contractor on the project and will design and
construct 389km of the railway line.
The financing has also been arranged under the OECD Common
Approaches for Officially-Supported Export Credits and
Environmental and Social Due Diligence which commit OECD
countries to taking environmental and social impacts into
account when granting officially supported export credits.
Ethiopia is rated B by Standard and Poor's, B1 by Moody's
and B by Fitch.
(Editing by Tessa Walsh)