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WASHINGTON, D.C., November 23, 1999 -
The International Finance Corporation has signed an agreement to provide US$50 million in financing to the Panama Canal Railway Company (PCRC), to renovate and operate the railway link between the Panamanian coastal ports of Colon and Balboa.
PCRC has a 50-year concession to operate Panama Canal Railway, covering 47 miles of track that forms a land link between ports on the Atlantic and Pacific coasts of Panama, complementing the shipping link of the Panama canal. The project, costing $75 million, involves renovating train tracks, constructing intermodal terminals, leasing of rolling stock, and purchasing terminal equipment.
IFC's investment includes a loan of $15 million and an equity investment of $5 million. IFC has also mobilized a $30 million B loan for the account of participant banks, ABN AMRO Bank, Deutsche VerkehrsBank, and Dresdner Bank.
The railroad will strengthen the integrated transportation system that makes the most of Panama's unique geographic location as an international and regional transit node, said Mr. Declan Duff, IFC Director of the Telecommunications, Transportation and Utilities Department. The project reflects the success of ship-to-ship container transshipment in Panama and will expand the role of the private sector in providing transportation.
PCRC is owned jointly by Kansas City Southern Industries, Inc. (KCSI) and Lanco International, Inc. (Lanco). KCSI is the parent company of the Kansas City Southern Railroad Company, one of North America's major (Class I) railroads. Lanco is the parent company of Mi-Jack Products, Inc. and In-Terminal Services, the largest independent intermodal terminal operator in North America.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
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