DAKAR - Senegal's President Macky Sall said on Thursday that financing is in place to enable construction to begin in earnest on a $1.13 billion deep-water port being developed by Dubai's state-owned port operator DP World.
The project in Ndayane, around 50 km (31 miles) south of the capital Dakar, is the biggest private investment in the West African nation.
"We have lifted all the constraints linked to financing, and the state has met all its obligations so that this major project can start," Sall told a summit on infrastructure finance in Africa, held in the Senegalese capital, Dakar.
"We hope that this February, we'll start the work on the site."
The project is a joint venture between the Dubai-based logistics provider and the Port Authority of Dakar.
The partners broke ground in January 2022, but further discussions on finance and legal matters were needed after Sall decided to lift Senegal's stake from 10% to 40%, Abdou Karim Diarra, a spokesman for Dakar Port Authority, said.
DP World has said the first phase will include 840 metres of quay and a 5 km marine channel designed to handle 366-metre vessels, with a second phase adding 410 metres of container quay and further dredging to handle 400-metre vessels.
The two-day infrastructure summit of African leaders, investors and development finance partners, aims to raise financing to accelerate infrastructure projects on the continent.
Sall, who is chairman of the African Union, told the summit that such projects remain under-financed, and when they do get finance, they are burdened by high interest rates and debts.
According to the latest report by the Infrastructure Consortium for Africa, published in Dec. 2022, financing for African infrastructure was $81 billion in 2020 compared with $100 billion in 2018, Sall said, attributing the drop to COVID-19.
"Africa has always paid a high price for its (infrastructure) projects because of high interest rates," he said, adding that the continent needed to raise the issue with its partners.
"For long-term projects such as railways, our countries are sometimes obliged to reimburse their debt within a short time," he said, adding that "abusive credit ratings" and especially the perception of investment risks in Africa, is usually higher that the reality.
"We pay a high price for this," Sall said, citing the example of export credit finance from Import-Export banks where interest rates stand at around 3%, but countries need to add up to 12% for insurance.
(Reporting by Bate Felix and Anait Miridzhanian, with additional reporting by Diadie Ba; Editing by Sharon Singleton)