The West African country of Gabon has signed a contract with the operator of its only railway to begin the second phase of its modernisation.

The deal was agreed by Christian Magni, director general of Société d’exploitation du Transgabonais (Setrag), and Loic Ndinga Moudouma, Gabon’s minister of transport.

According to the deal, the government will contribute €200m towards the estimated €545m cost of the project, with the balance to be funded by Setrag, with the help of loans from the International Finance Corporation of the World Bank, among others.

The standard gauge Trans-Gabon Railway covers the 650km between the Port of Owendo, near the capital city of Libreville, and Franceville, Gabon’s third city and the centre of its mining industry.

The agreement covers a 200km stretch from Milolé to the Franceville terminus. Work will also be carried out on a 30km central section between Ndjolé and Alembé.

The aim of the modernisation is to reduce operating costs, improve reliability and restore the capacity of the track.

The line, which last year carried 10 million tonnes of freight and some 230,000 passengers, will have a number of improvements, such sections of new track and the replacement of wooden sleepers with concrete versions.

Setrag is a private company owned by the Compagnie Minière de l’Ogooué, which is a subsidiary of French mining group Eramet, the world’s second largest manganese exporter. Under the concession agreement, Setrag began operating the line in 2005, and will continue until 2035.

Reconstruction work on the western section, between Owendo and Ndjolé, is nearing completion. An estimated €350m has been spent on the modernisation of 300km track.