On 1 May, the Mozambican government signed an agreement with the European Investment Bank (EIB) for a loan of €65 million (about $US86 million) at 2% for development at the port of Beira and the adjoining rail network.

Of this sum, €42 million will go towards completing reconstruction of the Sena line, from Beira to the coal mines at Moatize in the western province of Tete. This sum supplements the $US100 million already disbursed by the World Bank and €48 million from the shareholders of the Beira Railroad company (CCFB) itself to rebuild the 590km line, which is crucial for moving coal exports from Moatize to Beira. To all intents and purposes destroyed during the civil war, no trains have run during the past 25 years.

The EIB component to the funding is intended to improve the track and maintain the radio communication system, as well as essential buildings, to permit train operations at at least 60km/h over the entire length of the line. 

The remaining €23 million in the EIB loan (repayable over 20 years) will be used to finance emergency dredging of the 27km access channel at the port at Beira, to permit entry of ships up to 60,000 tonnes. Denmark and Holland have already contributed $US13 million towards this project.

While it is estimated that the Sena line will be able to carry 12 million tonnes of coal a year, the Brazilian mining company Companhia Vale do Rio Doce (CVRD), intends to export 11 million tonnes, and this is only one of several producers with coal licences in Tete. Others include Riversdale Mining of Australia and Coal India. As the Sena line alone cannot hope to meet the requirements of all these companies when their mines are in full production, alternative transport avenues are being examined.  One possibility is a new railway from Moatize to Blantyre in Malawi, from where access to the port of Nacala is available via the Mozambique northern Line.

Related posts:

1. NEW LINE IN MOZAMBIQUE
2. SENA LINE ALMOST COMPLETE
3. FURTHER SENA LINE DELAY
4. FIRST TRAIN AT MOATIZE
5. NEW MOZAMBIQUE LINES