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IFC INVESTS US$10 MILLION TO DEVELOP MODERN BULK COMMODITIES HANDLING TERMINAL IN KENYA —first of its kind private facility in the region—


L. Joseph
Phone: (202) 473-7700
Fax: (202) 974-4384
E-mail: ljoseph@ifc.org


WASHINGTON, D.C., April 22—The International Finance Corporation will lend the Kenyan company, Grain Bulk Handlers Ltd. (GBHL), US$10 million to
build the first modern bulk handling and storage facility for unloading grain and fertilizer at the port of Mombasa.  Mombasa is Kenya’s major port and an important
regional port for landlocked countries in East Africa as well as a drop off point for grain supply by international donor agencies.


Under current conditions, 25,000-ton vessels arriving in the port typically can wait four days to berth and 12 days to unload using mechanical grabs and manual
bagging systems.  The outdated facilities cause congestion at general cargo berths and at the port where long truck queues wait for grain cargoes.


When the new US$32 million terminal is complete in early1999, unloading capacity will amount to 10,000 tons per day.  Two 300-metric tons per hour capacity
ship unloaders will off-load ships and move commodities via an overhead conveyor system to a storage facility and bagging plant outside the port area.  This project
will reduce congestion inside the port and reduce transportation and handling costs by an average of more than US$8 per ton.  In its first year, the new terminal is
expected to handle 50% of the region’s food grain imports.  The terminal will also significantly improve the quality of service at the Mombasa port by improving
general cargo berth availability.


Upon construction completion, the UK firm Portia Management Services Ltd. (PMSL) will handle day-to-day operations under an 8-year management contract.
PMSL is a subsidiary of Mersey Docks & Harbour Company which owns and operates ports and terminals worldwide.


GBHL is 80% owned by a local entrepreneur, Mr. Mohamed Jaffer, whose family has been in the transport, real estate, and trading business in Mombasa for over
20 years.  The remaining 20% of GBHL shares are held by the Varsani family.


IFC’s financing package consists of a senior loan of US$7 million and a subordinated loan of up to US$3 million.  The Commonwealth Development Corporation
and PROPARCO are also investing in the project.


The project will set a new standard for port operations in Africa, and provide a valuable demonstration of the benefits of private management in intermodal logistics
management. Declan Duff, the IFC director responsible for some 15 IFC port investments, said the project should demonstrate that private management can quickly
overcome bottlenecks in critical trading activities which can make or break a country’s competitive position. He anticipated that productivity rates in Mombasa
would compare well with what IFC has seen elsewhere.


IFC, part of the World Bank group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international
financial markets, and providing technical assistance and advice to governments and businesses.