DP World, CDC Form Africa Ports Partnership, Pledge $1.7 Billion
DP World Ltd. and CDC Group Plc have formed a partnership to develop ports in Africa and committed to spending $1.72 billion on infrastructure over the next few years.
DP World, which is based in Dubai and is one of the world’s biggest port operators, will invest $1 billion in facilities including in Dakar in Senegal, Ain Sokhna in Egypt, and Berbera in Somaliland. CDC, a U.K.-based development finance group, will initially contribute $320 million and has committed an additional $400 million over the next few years.
The partnership, along with the modernization and expansions at the ports, is expected to boost trade in the three territories, as well as further inland in Mali in West Africa and Ethiopia in the Horn of Africa, the companies said in a statement on Tuesday. They intend spending about $1 billion on the port in Dakar alone.
“In the short term, it’s about enhancing the capacity of these three countries,” Nick O’Donohoe, CDC’s chief executive officer, said in an interview. “In the longer term, it is about building out further ports infrastructure in other countries, other regions.”
The harbor in Dakar is exclusively a container port that can process 900,000 twenty-foot equivalent units, or TEU, a year. Sokhna, Egypt’s main Red Sea port and its gateway to the rest of Africa, and Berbera are primarily used to ship containers but have some bulk-goods facilities, and have an annual capacity of 950,000 TEU and 150,000 TEU respectively. By comparison, the continent’s biggest container port in the eastern South African city of Durban, can process 3.6 million TEU a year.
In addition to building a new facility at Ndayane, near Dakar, to expand the port’s capacity, the companies plan to improve logistics at Berbera and significantly increase capacity at Sokhna, which is undergoing a $520 million expansion, O’Donohoe said. They are also considering investing in inland ports in landlocked countries.
Trade facilitated by the ports will support 5 million jobs across the affected economies, create 138,000 jobs in the expansion phase, and improve access to goods for 35 million people, the companies said in the statement.
CDC will own a minority stake in the operating structure of the three ports, O’Donohoe said, declining to be more specific on the partnership.
The development finance institution invests about $2.5 billion a year, of which 60% goes to Africa, he said. Other investments include power and telecommunications infrastructure.