WHAT IS believed to be the first African concession in recent times where the private sector has secured bank finance to upgrade rail infrastructure achieved financial close on December 3. This cleared the way for a joint venture of New Limpopo Project Investments and Spoornet to take over management of Zambia’s national railway and operate freight and passenger services.

Freight and passenger operations are covered by separate agreements signed respectively on February 14 and August 9 2003 (RG 9.03 p528). Passenger trains will be subsidised, but freight will be carried on a commercial basis. The final agreement signed last month enables South African bank Nedcor to fund major works.

The consortium was advised by solicitors Wragge & Co, who said that the final concession agreement required significant adjustment ’to find an acceptable position whereby the concessionaire and financiers provided capital funds for upgrading the infrastructure, but received sufficient protection for changes in circumstances over the life of the 20-year concession.’