Briefing Memorandum:

Port of Mayumba – Republic of Gabon

ICA Meeting:

Financing Transport for Growth in Africa

December 3-4, 2007

Republic of Gabon: Port of Mayumba

TABLE OF CONTENTS

1. Summary

2. The Project

3. Economic Rationale

4. Feasibility Analysis

5. Development Status

6. Project Contacts

7. Risk Factors

8. Next Steps

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Republic of Gabon: Port of Mayumba

1. Summary
The Government of the Republic of Gabon has mandated the High Port Authority of
Mayumba with the mission to contribute to the promotion and construction of a
deep sea water port in Mayumba (“the Port”).
The port, which would be built in the southwest of Gabon, would be used mainly
to enhance the region’s value through the commercialization and export of its
natural resources (i.e. wood). It is also expected to improve accessibility to the
Nyanga region, and to create a favourable commercial environment for the
development of industrial fishing and leisure marine zones.

The port project, which would be financed under a public-private partnership,

would include 3 components, namely:
• the port and the associated utilities;
• a road linking the Nyanga Province to the sea; and
• a bridge leading to the port.
Although the Government would prefer to finance only the access roads and leave
the financing and the construction of the port to the private sector, the Consultant
(see below) has proposed that the public sector assumes responsibility for most of
the infrastructures, notably the construction of a 109 kilometre road, a 300 metre
bridge, and the basic port infrastructures, while the private sector could add to
the port by building storage facilities and installing the necessary equipment.
Total project cost estimates range from €147 million to €228 million. The wide
range is mainly due to the choice of the number of lanes of the road and bridge
leading to the port, which would either include 2 lanes or 4 lanes.
The development of a port in Mayumba, first mooted in 1958, was the subject of a
preliminary feasibility study as far back as 1976 and updated in 1984 by BCEOM, a
French engineering firm. More recently in June 2003, Lambda Plan SA of Belgium
(the “Consultant”) conducted a pre-feasibility study, which was financed by the
African Development Bank.

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Republic of Gabon: Port of Mayumba

2. The Project
2.1 Project Description
The deep sea port would initially host 3 docks (expandable to 5) capable of
accommodating 832,000 tons per annum over a 20-year period and would offer an
additional reserve capacity of 1,200,000 tons per annum. As a reference, a
minimum activity level of 200,000 tons per annum is required to justify the
construction of 1 dock.
The port would have the following characteristics:

Wood storage area at Matouti site of approximately 30 hectares

Construction of a concrete site (temporary storage)
Length: 100 m; Width: 30 meters

Construction of a loading dock for general goods
Length: 450m; Width: 45 meters

Construction of a dock for speedboats, supply boats, fishing boats
Length: 200 m; Width: 25 meters

Construction of a small dock for tug boats, marina, fisherman, etc…
Length: 100 m; Width: 20 meters

Minimal Structure

The basic port would initially be built according to the picture above and could be
expanded by one or more docks. The picture below represents the maximum size
the port could potentially be expanded to should it become a regional hub after a
20-year period.

Grand Port (20+ yrs)

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Republic of Gabon: Port of Mayumba

The deep sea port would be located across the Laguna. To access the port, it
would be necessary to build a 300 metre access bridge over the Laguna and an
access road of 109 km in length which would facilitate access to the port. The
bridge and road leading to the port would have either 2 lanes or 4 lanes.

2.2 Environmental and Social Impacts

An environmental impact study has been carried out by the Consultant, which
raised some issues, notably the need to protect the rich bio-diversity in Mayumba
and the surrounding areas.
In the Yaounde Forest Summit (1999) hosted jointly by the President of Cameroon
and the World Wildlife Fund, Gabon declared a portion of the Mayumba coastal
strip a National protected Park (the Mayumba National Park). The area, which
begins at the national boundaries with Congo, stretches 50 km up the coast and
covers a width of 16 km (15 km off-shore and 1-km on shore). The National Park is
located 25 km south of the planned location of the Mayumba Port. The main
purpose of the Park is to protect wildlife, notably sea turtles and whales. Mayumba
is home to many other types of fish species and a rich biological environment,
necessitating further research on the environmental effects of the port prior to
launching the project.
The social impact on the local population is limited. The study has estimated that
about 30 families would have to be relocated, making the human and financial cost
minimal.

3. Economic Rationale
3.1 Export Facilitation
The Government of Gabon is keen on contributing to the economic growth of its
southern region and has accordingly taken initial steps to study the viability of
building a deep sea water port in the city of Mayumba.
The southern region offers significant amounts of wood and, although unrealized,
there is a strong potential for other mining resources, such as marble, iron, ore
and other resources.

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Republic of Gabon: Port of Mayumba

At present, trading activity (exports) in the city of Mayumba is conducted through

very basic infrastructure. As can be seen in the pictures below, wood stock is
stored along the coast before being loaded on a wood raft, pulled by a tug boat
and transferred to a waiting vessel in the sea.
Wood Storage Raft

Tug boat Exporting Vessel

The port’s main purpose and activity will be to facilitate the export of resources
(principally wood) from the Nyanga Province.
3.1.1 Wood Market
Of a total land area of 27 million hectares (ha), roughly 20 million ha, or 74% of
Gabon makes up the national forest (9% of forests in Africa). According to the U.N.
Food and Agricultural Organization, Gabon’s de-forestation rate between 1990 and
2000 was low at 0.5% per annum.

As of 2001, the international market absorbed roughly 60 million m3 of tropical

woods, 2.1 million m3 of which originated from Gabon. Gabon, which is home to
over 30 wood types, exports mainly to Asia (50%) and Europe (30%).

As can be seen in the table below, with production projected to increase to 5

million m3 by 2015, Gabon aims to process 70% of production by 2015.
Table: Wood Production Forecast

Year Production Processing/Transforming Processing capacity

(in million3 ) (in million3 )
1996 2,000,000 140,000 7%
2002 2,140,000 300,000 14%
2005 2,500,000 750,000 30%
2015 5,000,000 3,500,000 70%

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Republic of Gabon: Port of Mayumba

3.1.2 Forest Concessions

As of 2000, 12 million hectares were under concession. This figure has increased
significantly over the last 50 years, increasing from 1.6 million ha in 1957 to 11.8
million hectares in 1997, a seven-fold increase over 4 decades. The number of
concessionaires has risen to over 200, with the largest 5 accounting for 50% of land
concessions. Concessions in the Nyanga province are relatively recent, dating back
to the 1995-97 period.
3.1.3 Mayumba region
As of 2000, the province of Nyanga under concession has reached 2.20 million
hectares, distributed amongst 66 land owners, 33 temporary exploration licenses,
and 2 industrial permits. There were 7 active companies, with rights to operate
with their own concession license or undertake on behalf of other landowners or
permit holders. Annual production had reached roughly 200,000 m3, substantially
all of which was exported (roughly 10% of national production) – equivalent to 40
ship loads.
3.1.4 Summary of Wood market and its potential impact on the Mayumba Port
The wood market in the surrounding geographic areas would undoubtedly benefit
from the construction of a new Port. The new Port would ultimately serve the
following geographic zones:

Province of Nyanga

South-east of the province of Nagounie, which includes Ndende, Lebamba,
Mbigou, Baposso and Malinga

A 50km to 100 km stretch into Congo, which include Nzambi, Nyanga, Banda,
Divene and Moutsemgani and the Ndini area

Table: Mayumba Wood Export Forecast

Wood Exports 2007 2012 2022

(T, 000’) Worst Base Best Worst Base Best Worst Base Best
Gabon Logs 173 216 271 250 200 150 250 200 150
Congo Logs 20 50 100 50 100 200 100 150 200
Gabon other 5 10 20 50 100 150 100 150 200
Total 198 276 391 350 400 500 450 500 550

3.1.5 Mining Industry

In spite of its potential, Gabon’s mining activity today remains largely untapped.
The results of a number of public and private studies examining this sector’s
potential have been kept confidential. The Consultant had been asked to
undertake an analysis of the mining potential of the Nyanga province. For purposes
of efficiency and practicality, the Consultant focused on the largest mining sites in
the area, notably:

Marble mine located at Dousse-Oussou; reserves of 12 million tons

Iron mine located at Milingui-Tchibanga, reserves estimated at 126 million tons

Barytine mine located in Dourekiki, reserves of 1 million tons

Talc mine located between Tchibanga and Moabi, reserves of 75 million tons.

In reviewing the findings of past studies, the Consultant has come to the
conclusion that one of the largest obstacles to the development of these mines is
the lack of infrastructure, notably roads and ports that would enable the export of
these goods.
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Republic of Gabon: Port of Mayumba

3.2 Demand for a Southern Port

There has been significant development in the extraction of Gabon’s abundant
natural resources over the last four decades. The city of Mayumba has largely
been bypassed due to the lack of supporting infrastructure in both the city and the
surrounding province of Nyanga. In fact there are no nearby ports or railways and
no paved roads and, aside from some few communication links, very little
infrastructure exists at all. Access to the city of Mayumba is constrained by very
poor passages. The Consultant emphasized that the development of the port and
its subsequent success are dependent on the development of appropriate
supporting infrastructure.
3.2.1 Ports in Gabon
Gabon’s coast line, which stretches 800 km along the Atlantic coast, is one of the
longest of Central Africa, making it one of the leading maritime-oriented countries
in the sub-region. Aside from what can be considered a “Port Zone” at Mayumba,
there are two main ports in Gabon, namely:

Libreville (Owendo): Built in 1974, the port in Libreville is Gabon’s largest,
accounting for 80% of port activity in Gabon (excl. crude oil exports).
It benefits from road and rail link.

Port-Gentil: This island port is accessible via air or sea. Its main activity is the
export of oil. Fishing and wood products represent a marginal share of
its activity.
The Mayumba “port zone” trades mainly in wood activity and contains very poor/
non-existent infrastructure.
The two ports are considered ‘northern’ ports, while the port zone of Mayumba is
considered a ‘southern’ port. The government of Gabon is keen on developing a
proper port in the south of the country to take advantage of the benefit the
resource richness of its southern regions.
3.2.2 Comparative Cost/ Benefit Analysis
An analysis was undertaken by the Consultant to determine the costs and benefits
associated with the Port in comparison with Port Gentil, located further north. As
can be seen in the below table, most, but not all of the surrounding cities would
find it more costly to transport their products to Port Gentil, making the new Port
of Mayumba a viable alternative.
Table: Comparative cost (Mayumba Port and Port Gentil)

Arriving to
Departing from
Mayumba Port Gentil
Tchibanga (distance/cost) 109 km FCFA 9,810/T 291 km FCFA 33,705/T
Ndende (distance/cost) 201 km FCFA 18,090/T 202 km FCFA 25,695/T
Lebamba (distance/cost) 237 km FCFA 21,330/T 238 km FCFA 28,935/T
Mouila (distance/cost) 280 km FCFA 25,200/T 123 km FCFA 18,585/T
Yeno (distance/cost) 322 km FCFA 28,980/T 203 km FCFA 25,785/T
Mbigou (distance/cost) 320 km FCFA 28,800/T 283 km FCFA 38,985/T
For reference: exchange rate at 31/10/2007 Eur 1 = F CFA 655.9

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Republic of Gabon: Port of Mayumba

3.3 Local Support

The Consultant polled local operators and other local persons on the need for new
infrastructures in the area. The overwhelming majority of those polled expressed
the desire to see the construction of:
1. A road linking Tchibanga to Mayumbo
2. Construction of a bridge on the Banio linking the city to the deep sea port
3. A deep sea port

Table: Increased forecast of wood exports

Term Change Export (m3 ) Exports (tons)

Less than 3 yrs +30% 260,000 214,500
5-6 yrs +50% 300,000 247,500
10-12 yrs +75% 350,000 288,750

The major operators exporting wood have expressed their willingness to relocate
to the port, and invest in the necessary equipment to use the port. They have,
however, refused to invest directly in the construction of the port. Two oil
exporters have expressed their preference for the upgrading of the current Port-
Gentil located further north rather than the construction of a new port.
3.4 Competitive Landscape: Congo
Although the new port would certainly benefit from the addition of wood exports
from Congo, this would run counter to the interests of the wood industry in Gabon.
Nonetheless, operators located as a far as 150 km to 200 km away from the port,
including those from Congo, could potentially use the port. The Consultant has
estimated that wood exports originating from Congo would amount to 50,000 m3 in
a ‘worst case’ scenario’, 100,000 m3 in a ‘base case’ scenario and 200,000 m3 in a
‘best case’ scenario. The area near the potential site of the Mayumba port is not
currently an active trading area.
3.5 Government Support
The Government of Gabon has placed emphasis on the need to have a proper port
in the South of the country to facilitate exports over the coming years which are
expected to increase significantly as can be seen below. The figures in the
following table, using a base case scenario, project growth in exports over a 20-
year period.
Table: Increased Exports

Fish
(’000 Tons) Wood Marble Talc Ore (Import/
Export)
2002 136 0 0 0 5 2
2007 216 10 0 0 6 4
2012 300 40 50 2,000 12 9
2022 350 40 100 2,500 15 12

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Republic of Gabon: Port of Mayumba

Total exports would increase from current levels (136,000 tons) to between 1 and
3 million tons over a 20-year period. The port of Mayumba is not expected to have
any negative impact on the other existing ports, rather it would act as a developer
of new trade within the region. The Government of Gabon would benefit from the
port via taxes it would receive as a result of the increased exploration and trading
activity. Finally, the new port could be a catalyst for a dynamic change in the local
economy, and subsequently become a regional economic hub.
3.5.1 Regulatory framework
The Government of Gabon has taken a number of actions to try and attract foreign
investors into the sector, notably:
 Implementation of a Mining Code
 Implementation of an attractive Investment Code, with fiscal exemptions and
guarantees for repatriation of profits
 Single point of contact for all administrative procedures

The Consultant has determined that the above rules and regulations constitute an
attractive framework to attract foreign investors to the sector in general.

4. Economic & Financial Feasibility Analysis

As this project is still in the early study phase, the full legal parameters have yet
to be defined, however the government of the Republic of Gabon has expressed an
interest in developing this port project in partnership with the private sector,
within the framework of a private concession and in conformity with the existing
laws of the Republic of Gabon.
The Consultant conducted a preliminary financial feasibility assessment based on
previous studies and comparative projects in other African countries. A
comprehensive financial viability analysis would be undertaken in a full feasibility
study.
4.1 Project Costs
The costs associated with this project include the investments required to develop
the necessary infrastructures of the port and the surrounding area leading to the
port. This includes:
 Construction of a paved road between Tchibanga and Mayumba
 Construction of a bridge on the Banio Laguna
 Construction of a deep sea port at the Matouti site
 Rehabilitation and extention of utilities and telecommunications infrastructures

The High Port Authority is responsible for seeking investments and financing for
this project. Other investments not directly related to the construction of the port
and the access roads leading to it have not been considered.
4.1.1 Cost estimates for the paved road between Tchibanga and Mayumba

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Republic of Gabon: Port of Mayumba

This portion of the project consists of building a 109 km road on what is now an
artificially created passageway. The authorities have not yet decided whether to
build a 2-lane or 4-lane road. Combining various estimates and past experience in
other African countries, the Consultant has estimated an average cost of FCFA 325
mil./km (€496,000/km), rendering the cost of a 2-lane road at €54 million and the
cost a 4-lane road at €108 million.
Existing road linking Tchibanga and Mayumba

4.1.2 Cost estimate for the bridge on the Banio Laguna

The Port would be linked to the Mayumba shore via bridge over the Banio Laguna.
The bridge would be 300 metres in length and would consist of either 2 lanes or 4
lanes. Accordingly, the Consultant has estimated that the costs will vary between
€5 million and €10 million
Banio Laguna and tugboat

4.1.3 Cost estimate for the deep-sea port

Expected Costs
 Embankment of port zone: €10 million
 Stilts: €35 million
 Loading dock: €28 million
 Dock for speedboats and fishing: €5 million
 Dock for tug boats and tourism: €2 million
 Total: €80 million

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Republic of Gabon: Port of Mayumba

In order to minimize the immediate costs to the private sector, the Consultant has
proposed building the port in two phases. Phase 1 would cost €68 million, while
phase 2 would cost an additional €12 million, which would be undertaken after an
initial 10-year period, if necessary. The extension would mainly involve the loading
dock. Further analysis of this suggestion has been left for a feasibility study.
4.1.4 Other Costs
Utilities and Telecommunications. In addition to the road and port infrastructure
costs, other investments must be made, notably in water, electricity, oil and
telecommunications. The city of Mayumba significantly lacks drinking water and
the authorities have been considering various alternatives to address this issue. It
is estimated that the daily needs of the local community amounts to 400m3 per
day.

Other costs include the addition of 2 diesel power generators (1,200 Kva and 1,500
Kva), an oil storage facility and the rehabilitation of the local telecommunications
station, which was partially damaged in a storm. These costs have been estimated
at €30 million. The Consultant has again suggested spreading these costs to two
phases, €20 million and €10 million respectively after a 10-year period. The
Government would expect the private sector to finance this portion of the project.
This component should be reviewed in a feasibility study as well.
Below is a summary of costs broken down between the access roads and the
bridge, which would to be financed by the Government; and of the Port and
associated utilities, which would be financed by the private sector.
Table: Public Investments

Public Investments 2 lane road and bridge 4 lane road and bridge
Tchibanga-Mayumba Road €54 million €108 million
Banio Laguna Bridge €5 million €10 million
Total €59 million €118 million

Table: Private Investments

Private Investments Phase I Phase II Total

Embankment of port zone €6 million + €4 million €10 million
Stilts €35 million - €35 million
Loading Dock €20 million + €8 million €28 million
Dock for speedboats and fishing €5 million - €5 million
Dock for tug boats and tourism €2 million - €2 million
Utilities-Telecommunications €20 million + €10 million €30 million
Total €88 million €22 million €110 million

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Republic of Gabon: Port of Mayumba

4.2 Project Revenues

4.2.1 Tchibanga-Mayumba road
The road is expected to be wholly financed by the Government of Gabon. There
are no expected revenues as there will most likely not be any toll charges.
4.2.2 Banio Laguna bridge
The bridge is expected to be financed by the Government as well and, similarly, no
toll charge is expected, as the vehicle traffic is not significant.
4.2.3 Deep Sea Port
The deep sea port is estimated to cost between €88 million and €110 million.
Based on the Consultant’s estimates, the most optimistic payback period would
range from 14 years to 18 years. This scenario would entail earning annual
revenues of €6.14 million. The revenues of the port can be expected from the
following sources:
Revenues paid by users of the port:
 Tax based on tonnage for general merchandise
 Tax based on tonnage for mining products
 Concession rights for use of port facilities
 Rights to use utilities and telecommunications

Revenues paid by transiting ships:

 Mooring rights
 Approach and docking rights
 Rights to use utilities and telecommunications

Table: Financial Projections

5 yrs 10 yrs 20 yrs
Scenario
Base case Best Case Base case Best Case Base case Best Case
Annual Tonnage 371,000 518,000 624,000 2,845,000 827,000 3,515,000
Ships per year 30 50 60 100 80 120

Revenue from Users

Tax from general merchandise (€2/T) € 742,000 € 1,036,000 € 1,248,000 € 1,690,000 € 1,654,000 € 2,030,000
Tax on mining products (€0.5/T) €0 €0 €0 € 1,000,000 €0 € 1,250,000
Concession rights - Zone 1 (10 ha x €15/sq. m./yr) € 1,500,000 € 1,500,000 € 1,500,000 € 1,500,000 € 1,500,000 € 1,500,000
Concession rights - Zone 2 (100 ha x €1.5/sq. m./yr) € 300,000 € 450,000 € 600,000 € 1,350,000 € 750,000 € 1,500,000
Droits de raccordage € 50,000 € 75,000 € 100,000 € 250,000 € 150,000 € 250,000

Revenue from Users

Mooring rights (€1,000 per ship) € 30,000 € 50,000 € 60,000 € 100,000 € 80,000 € 120,000
Docking rights (€2,000 per ship) € 60,000 € 100,000 € 120,000 € 200,000 € 160,000 € 240,000
Droits de raccordage € 15,000 € 25,000 € 30,000 € 50,000 € 40,000 € 60,000

Total annual revenues € 2,697,000 € 3,236,000 € 3,658,000 € 6,140,000 € 4,334,000 € 6,950,000

Scenario 1: Maximum Investment €110 mil. €110 mil. €110 mil. €110 mil. €110 mil. €110 mil.
Payback 41 yrs 34 yrs 30 yrs 18 yrs 25 yrs 16 yrs

Scenario 2: Minimum Investment €88 mil. €88 mil. €88 mil. €88 mil. €88 mil. €88 mil.
Payback 33 yrs 27 yrs 24 yrs 14 yrs 25 yrs 16 yrs

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Republic of Gabon: Port of Mayumba

4.3 Financial Analysis

In light of the results of the sensitivity analysis, which suggests that the payback
period could reach 41 years, the Government of Gabon may have to consider
reviewing the proposed structure of the Public-Private Partnership to enhance the
opportunity for private sector participation. Specifically, the Government may
have to contribute to the construction of most or all of the basic infrastructure of
the Deep Sea Port and let the private sector finance the operational infrastructure
(e.g. loading equipment, terminals, etc.)

5. Development Status
The port project is yet to be launched, hence there is no existing legal entity, no
ownership structure nor is there a target launch date at this point. The
Government of Gabon and the African Development Bank had agreed to conduct a
feasibility study if the results of the pre-feasibility study were deemed
satisfactory. Although the Government of Gabon still publicly supports this project,
there has been no more information or progress on this project since the pre-
feasibility study was completed in 2003.

6. Project Contacts
The contact for this project is the High Port Authority of Mayumba, which is under
the purview of the National Port Authority, L’Office National des Ports et Rades du
Gabon (OPRAG), whose responsibility it is to manage the country’s port activity.
Please contact:
Jean-Pierre Oyiba
Director
National Port Authority
Owendo B.P. 1051
Libreville
Gabon

Tel : +241 70 00 48
Fax : +241 70 37 35

7. Risk Factors & Mitigation Measures

Risk Type Risk Mitigant

Financial projections under the 5-yr base case scenario
suggest 30 shiploads per annum. This is a very conservative
Low utilization
Commercial estimate as actual figures in 2001 were already in excess of
rate
this at 40 shiploads per annum. Hence, we do not believe
the port will suffer from low utilization.
Review and modification of current PPP structure, where
Government would have to contribute a greater share
Lack of Private
Financial towards the construction of the basic infrastructure,
Sector Interest
ultimately reducing the burden on the private sector and
making the project more attractive for private financiers.

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Republic of Gabon: Port of Mayumba

Risk Type Risk Mitigant

Gabon has several national parks and reserves, which
protect wildlife species and national forests. Hence, the
Protection of
Environmental country it is likely to seriously address any environmental
bio-diversity
issues prior to the construction of the port.

Relocation Only 30 families are expected to be relocated as a result of

Social
Requirements the construction of the port.

8. Next Steps
Within the last month, the Government of Gabon secured funding for a feasibility
study for the Port of Mayumba from the Islamic Development Bank. Ideally, this
study would identify the precise role of the private sector for the construction of
the Port.

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