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Bolloré Logistics has hired several banks to prepare for a Paris listing of a section of the 3,000 km West African rail loop project, which will serve as a link for Côte d'Ivoire, Burkina Faso, Niger, Benin, Togo, and Nigeria.
According to sources, Goldman Sachs, BNP Paribas, Societe Generale and Credit Agricole have been mandated to start work for the potential listing of the project. It is expected that the initial public offering (IPO) reaches up to €500 million (US$533 million) in the first half of 2016.
In November 2013 the President of the Niger, Mahamadou Issoufou, and the President of Benin, Thomas Boni Yayi, signed a Memorandum of Understanding (MoU) to carry out part of the West African rail loop, between Cotonou (Benin) and Niamey (Niger). Under the agreement Bolloré Group was named strategic partner for the project.
At that time the two Presidents decided to create a special purpose vehicle (SPV) with FCFA70 billion (US$113.8 million) equity to carry out the project. Each state owns a 10% share in the SPV, 20 % is held by Benin's private sector, 20% by Niger's private sector and 40% by Bolloré Group.
The latter will also be responsible for raising the finance needed to carry out the work; the projected overall investment cost is nearly 1,000 billion CFA francs (around US$1.71 billion).
The Cotonou-Parakou-Niamey rail link project will involve the rehabilitation of the Cotonou-Parakou line, which dates from 1936, and then building a new section connecting Parakou to Niamey. The project will also entail the operation of the entire line.
Hogan Lovells has been acting as legal advisor to support the governments of Benin and Niger on the rail loop project. The company's role was facilitated by the African Legal Support Facility (ALSF) on the request of the governments of Benin and Niger.
The ALFS, is an agency of the African Development Bank, that has been supporting African governments in the negotiation of complex commercial transactions since 2010.
The ALSF financed the work focused on the 1,850 km-long, US$3-billion Cotonou-Niamey and Niamey-Burkina Faso sections of the wider, 2,970 km-long West African rail loop project.
The main objective of the West African rail loop project is the creation of a rail lint to move minerals from mines to ports. Mineral exports are a major economic driver of Nigeria, Burkina Faso and Niger, and are expected to raise from approximately 110,000 tonnes per year in 2015 to 3.4 million tonnes per year by 2030.We have recently reported on several rail projects globally: