French asset manager Meridiam has taken a 40% stake in Setrag, operator of the Transgabonese railway, following a capital increase of $35.50m (€30m).

The firm also pledged to provide $47.33m (€40m) for Setrag’s financing, contributing to the Transgabonese railway’s future development.

Furthermore, the Gabonese State will purchase 9% of Setrag’s capital from Comilog.

Setrag is a subsidiary of Comilog, which itself is a unit of French mining group Eramet.

Comilog remains Setrag’s majority shareholder with a 51% stake.

Setrag runs the 650km railway line that connects Libreville to Franceville in Gabon.

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By GlobalData

Last year, the company carried around 330,000 annual passengers and nearly nine million tonnes of goods, with 90% being mining freight.

A new dynamic is currently being introduced with the aim of supporting the Plan de Remise à Niveau (PRN) to enhance the railway’s performance via security actions and modernisation.

It will also work towards the development of the transport capacity of passengers and goods to 19 million tonnes from 12 million tonnes.

This improvement is expected to back the growth of the Gabonese economy.

Eramet mining and metals division deputy CEO Kléber Silva said: “By acquiring a stake in the subsidiary’s capital, the Gabonese State, Eramet’s long-standing partner, confirms its commitment to growing the Gabonese transport business to support the country’s growth.

“In financial terms, this transaction significantly strengthens Setrag’s balance sheet, which will allow it to support its future development projects and thus rise to the highest standards in rail transport.”