— Construction of the deep water commercial harbor Port of Caio in Angola’s Cabinda enclave region has moved on a fast track since earlier this year when China’s Export-Import Bank agreed to a $710 million loan facility that would see the first phase completed before the end of 2017, according to Fundo Soberano de Angola (FSDEA) Chairman, Jose Filomeno dos Santos speaking to Bloomberg in London.
Through an African Infrastructure fund, managed by QG Investments Africa Ltd, the Angolan sovereign wealth fund FSDEA is also investing $180 million to gain a 31 percent stake in Caioporto S.A. The company was incorporated in 2012 in Luanda to facilitate and oversee the development and construction of the Port of Caio project, a major infrastructure initiative. Financial institutions are expected to provide $360 million for the project, while foreign investors will contribute $60 million.
Given a green light from budgeting authorities, the $1 billion port development is designed to diversify Angola’s economy away from overreliance on oil and natural resource mining revenues. It is also meant to enhance the development of Cabinda by creating jobs while also securing economic and social stability for one of the most remote regions of Angola. When the port is completed, estimates suggest that local employment numbers will rise substantially with up to 1,600 direct jobs for the operation of the port and as many as 30,000 additional indirect jobs for people who serve the port in various capacities.
The potential annual tax revenues from operations at Port of Caio are expected to reach up to $350 million when the project is finished.
Once operational, the port will offer a more direct route for oil exports and contribute to decongesting maritime commercial traffic at other regional ports. Angola, which competes with Nigeria as Africa’s top oil exporter, produces more than 65 percent of its 1.7 million barrels a day from offshore areas in the Cabinda region.
The oil-rich area has had a history of economic setbacks and continues to face poverty and security challenges from low-level separatist groups. The first phase of the Port of Caio development will include a 630-meter (2,070-foot) container terminal, shipyard facilities, warehouses, a power plant, a free-trade special zone and the Fútila Industrial Park. It’s also meant to enhance local economic growth by stimulating commerce generally, bringing new opportunities for investment, increase international trade and diversify export potential for a variety of products.
The port terminal will also increase mobility and improve access to healthcare, education and jobs for local communities in the isolated region, which lays 60 kilometers north of mainland Angola. In addition, the Angolan government has commissioned the purchase of two passenger ferries in the Netherlands to improve maritime links between Cabinda and Luanda.
China Road and Bridge Corporation (CRBC), the construction company contracted to build the port facilities, is required to hire local labor. This will automatically boost the region’s economy and bring additional social benefits to Cabinda.
The port is situated near the Congo River estuary and is surrounded by the Republic of Congo and the Democratic Republic of Congo. It is designed with a seawall protecting docked ships from heavy swells and a bridge linking the shore with the container terminal. With depths ranging from 14 to 18 meters it will eventually be able to host some of the largest vessels in the world and handle 60 containers per hour at each berth.
Despite Angola’s challenges, Port of Caio is one ambitious step towards major improvements that have long been needed in this developing nation.