DP World has begun the construction of a $1.13 billion deep-water port at Ndayane in Senegal, roughly 50km south of the capital Dakar.
Senegal’s President Macky Sall laid the foundation stone on Monday marking the biggest private investment in the West African Nation. The construction is a joint venture between DP World and the Port Authority of Dakar (PAD).
According to DP World, the first phase will include 840 meters of quay and a 5km marine channel designed to handle 366-metre vessels, with a second phase adding 410 meters of container quay and further dredging to handle 400-metre vessels.
The DP World Chairman Sultan Ahmed bin Sulayem also added that his company would develop and operate the 300- hectare container terminal, as well as finance and design the land and maritime infrastructure. The development of Port of Ndayane is meant to reinforce the Port of Dakar, West Africa’s third-largest Port.
“The Port of Ndayane, gives our country back its leadership position thanks to its comparative advantages unlike any other in the sub-region. This Port will be a powerful lever for growth, as a central link in the logistics chain, in line with the vision that his Excellency, the President of the Republic Macky Sall has set out in the Plan Senegal Emergent to make our country an integrated and competitive logistics hub,” said Alioune Ndoye, Senegal’s Minister of Fisheries and Maritime Economy.
The CDC Group, a UK’s development finance institution and impact investor, entered into a long-term investment with the DP World last year, aiming to accelerate Africa’s long-term trade potential.
The partnership hopes to help address stark trade imbalance through supporting modernization and expansion of ports and inland logistics across Africa. As a start, Ports of Dakar (Senegal), Sokhna (Egypt), and Berbera (Somaliland) are earmarked as beneficiaries.
DP World already has an existing stake in the three ports but expects to invest a further $1 billion through the new partnership over the next several years. CDC is committing approximately $320 million initially and it expects to top up with a further $400 million over the next several years.
The partnership specifically targeted these ports as they are projected to provide a gateway to international markets for countless African businesses. In addition, they are supporting the growth of a rich ecosystem of nascent export industries in their respective countries, currently stymied by logistics inefficiency.
By 2035, an estimated $51 million in additional trade is forecast to pass through these ports, equivalent of 3% of Senegal’s GDP, 3% of Egypt’s GDP and 6% of Somaliland’s GDP. The partnership is also expected to create 138,000 jobs through the ongoing expansions and modernizations, and improve supply chains for critical goods and staples, with a direct benefit to over 35 million people in the wider Horn of Africa and parts of the Sahel.
The construction of the port at Senegal reinforces West Africa’s shipping sector that is steadily turning into a watershed for maritime investments in Africa. Indeed, Senegal’s Port of Ndayane adds to this milestone.
Last month, MSC made a $6.4 billion proposal to buy out Bollore Group’s African Logistics businesses. They include ports, rail, and logistics entities spread across 46 African nations.
Interestingly, West Africa leads in Port concessions that Bollore Group currently controls. The Company almost has a monopoly in every Port, with 18 West African container terminals falling under its command.
Africa’s logistics sector is now a gold mine for investors fueled by tremendous growth in the e-commerce market. According to a 2018 African Tech Startups Funding Report, of the $70 million African fintech funding for the year, logistics start-ups secured the biggest share.
“I believe widespread technology penetration in traditional logistics sectors like trucking and shipping has reinforced the need and opportunities for investments in the space,” said Tony Membere-Otaji, Founder of the Nigerian Company MVXchange, a tech-driven maritime platform that matches charter requests with available Offshore Support Vessels (OSVs).
Maersk echoed this sentiment, of Africa being a source for strong commerce growth when last November it formed a joint venture with South Africa’s Grindrod, a leading freight conglomerate in the region. The partnership will ensure Maersk attains greater ability in integrating its Ocean and landside services within the Southern Africa region. Grindrod has a long-held reputation in the landside logistics space in South Africa.
In December last year, DP World signed a Collaboration Agreement with the Democratic Republic of Congo (DRC) for the development of the deep-sea port at Banana. The conclusion of the Collaboration Agreement followed the signing of a term sheet earlier last year between DP World and the DRC Government, which summarized the agreed amendments to the initial contract signed in 2018.
This now paves the way for DP World to begin construction within 12 months of the DRC’s first deep-sea port, which will be located at Banana along the country’s 37km coastline on the Atlantic Ocean.
DP World will develop an initial 600-meter quay with an 18 m draft, capable of handling the largest vessels in operation. It will have a container handling capacity of about 450 000 TEUs (20-foot equivalent units) per year, and a 30-hectare yard to store containers. The port will feature the latest technology and equipment.
