Amsterdam-based emerging markets investor XSML has invested in Bamara Transports DJ, a road transport company in the Central African Republic (CAR), through its Central Africa SME Fund (CASF).
The CAR is a landlocked country which depends on its neighbours for imports, the vast majority of which arrive by road from Cameroon.
Air transport is limited due to its high cost, while river transport is only possible for six months each year during the rainy season.
As CAR has almost no industry itself the transport corridor from Douala in Cameroon to Bangui is considered an important lifeline for the country.
Bamara Transports DJ is a new company that will offer transport services between Bangui and Douala. The investment enables Bamara to buy two new trucks, two trailers and construct an 800 litre fuel tank to guarantee a constant supply of diesel for the trucks.
Financial terms of the deal were not disclosed.
“Our goal is to offer reliable transport services at an affordable price, which is possible as the road between Douala and Bangui is mostly paved,” said Bamara managing director Djazouli Mahadjir.
“With Bamara Transports DJ we offer a reliable and cheaper alternative for small market traders in CAR that would like to import goods at affordable prices for the local markets.”
XSML managing partner Jarl Heijstee added, “The high costs of transport are a serious bottleneck for the development of the Central African Republic.
“Besides the high prices, transport between Douala and Bangui is characterised by unreliability of services and a lack of quality.
“By investing in a small Central African transport company we want to stimulate the Central African transport sector and demonstrate that Central African transport companies can offer reliable transport solutions at a competitive price.”
Bamara is CASF’s ninth investment and its third in CAR.
CASF invests in small and medium-sized enterprises in the Democratic Republic of Congo and CAR.
The vehicle, which has a $25m target with 80 per cent allocation to DRC and 20 per cent in CAR, provides risk capital with an investment size ranging from $100,000 to $500,000.
CASF’s investors currently comprise IFC, FMO and Lundin Foundation.
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