IFC Likely to Offer Loan to Two Container Terminals in Egypt

The International Finance Corporation (IFC) is considering providing a loan of up to $175 million to help expansion of the Suez Canal Container Terminal (SCCT), which is located at the east of the northern entrance of the Suez Canal in Egypt. The IFC is expected to decide on the loan by 30 October.

The project is estimated to cost approximately $489 million, with approximately 64% financed by internally generated cashflows, and approximately 36% by debt. IFC is considering providing an A loan of up to $175 million along with a Risk Management Products in the form of interest rate swaps with a loan equivalent exposure of approximately $2 million.                                                  

The IFC is also expected to offer a $125 million loan for the construction of a second container terminal at Egypt’s Damietta Port on 30 October. The $665 million expansion is led by a consortium of European companies that includes Hapag-Lloyd, Eurogate Terminals, and Contship Italia. The consortium inked an agreement with Damietta Port Authority last year to develop the terminal under a 30-year build-operate-transfer framework.

The existing container terminal of SCCT is currently operating with a berth length of 2,400m. The expansion aims to increase the terminal’s capacity by an additional capacity of 2.1 million Twenty-foot equivalent units (TEUs) resulting in a total installed capacity of 6.6 million TEUs.

Works to Begin at End of 2023

For the purpose of this expansion, the General Authority of Suez Canal Economic Zone (SCZone) granted the company a concession agreement entailing the design, building, management and operation of a container terminal with an additional quay wall length of 955m and a yard adjacent to the current terminal. The construction is expected to start at the end of 2023, with initial operations anticipated in the second half of 2025.

The Project will be developed by SCCT, an Egyptian Joint Stock Company, which is 55% owned by Egyptian International Container Terminal (EICT), a fully owned subsidiary of APM Terminals B.V. (APMT), which is, in turn, 100% owned by A.P. Moller-Maersk (APMM).

Other shareholders include Cosco Shipping Ports Port Said Limited (20%), which is a subsidiary of Cosco Shipping Ports Limited (Cosco), National Bank of Egypt (5%), Suez Canal Authority (SCA, 5%), and its subsidiary Canal Mooring and Lights Company (5%). The remaining 10% shareholding is held by over 200 individual and corporate shareholders.

APMT is a global container terminal operator and a subsidiary of APMM, a Danish integrated transport and logistics company. It operates a network of ports and terminals across the world and provides comprehensive port services, including vessel berthing, container handling, storage, and inland transportation. With a presence in 65 locations across 38 countries, APMT is recognised as one of the largest in the maritime industry.

APMM is an integrated container logistics company headquartered in Copenhagen, Denmark. The company’s main business areas encompass container shipping, port terminals, and logistics. The ocean segment which includes global container shipping activities including strategic transshipment hubs, is the largest segment of the company. APMM operates in over 130 countries, and it is one the largest global container shipping companies.

Cosco is one of the leading global port operators, based in Hong Kong. Cosco’s primary business includes terminal operations, container handling, transportation, and storage. Its terminal portfolio covers the five main port regions and the middle and lower reaches of the Yangtze River in China, Europe, the Mediterranean, the Middle East, Southeast Asia, South America, and Africa. As of March 2023, Cosco operated and managed 367 berths at 37 ports globally, of which 220 were for containers, with an annual handling capacity of approximately 122 million TEU.