Plasduce Mkeli Mbossa, Director-General of the TPA (L) and Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World (R). Image by WAM

Dubai-based DP World signed Sunday a 30-year concession agreement with the Tanzania Ports Authority (TPA) to operate and modernize the multi-purpose Dar es Salaam Port, with plans to initially invest more than $250 million to upgrade it, WAM news agency reported.

Dar es Salaam Port

The investment could rise to $1 billion during the concession period, alongside hinterland logistics projects, it added.

The deal aims to optimize the port’s operations to improve transport and logistics services throughout Tanzania and its hinterland. This marks the first phase of a multi-phase investment plan.

The port connects Tanzania and the broader region to global markets. It also serves landlocked nations in east and southern Africa like Uganda, Rwanda, Burundi, and Zambia.

Plasduce Mbossa, director general of state-owned TPA, which currently manages the port, said DP World will lease and operate four of the 12 berths at the country’s largest port, Reuters reported. DP World will operate berths four to seven at the port, with the government looking for other investors to operate berths eight to 11, he said.

Global expansion

DP World signed in August a concession agreement with the Deendayal Port Authority in Gujarat, India, to build, operate, and maintain a new $510 million container terminal at Tuna-Tekra near the port.

This adds to five container terminals DP World already operates in India across Mumbai, Mundra, Cochin, and Chennai, with a combined capacity of 6 million TEUs. The addition of the new terminal will increase it to 8.2 million TEUs.

Later the same month, DP World entered into a strategic equity partnership with Turkey-based Evyap Group, securing a 58% equity stake in Evyap Port to enhance container port facilities in the Marmara gateway market.

Financial performance

DP World’s net profit fell 9.7% to $651 million in the first half of 2023, even though its total revenue grew by 14% to $9 billion.

However, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 7% to $2.6 billion, with an EBITDA margin of 28.9%.

Rating agency Fitch upgraded in May DP World‘s credit rating to ‘BBB+’ with a stable outlook in May, up from ‘BBB-‘ with a positive outlook by the end of 2022. This upgrade came after Moody’s Investors Service upgraded its rating to ‘Baa2’ in January, driven by improved performance and a stronger balance sheet.