Africa Finance Corporation (AFC) has signed concession agreements with the governments of Angola and Zambia for the financing, construction, ownership and operation of the transformational Zambia Lobito rail corridor project.
The agreements, which were signed on September 24, 2024, in a ceremonial signing hosted by U.S. Secretary of State Antony Blinken and the Biden Administration’s G-7 Partnership for Global Infrastructure and Investment (PGI) on the sidelines of the 79th session of the UN General Assembly (UNGA 79), paves the way for the AFC to spearhead and complete the development of the railway.
Last year, AFC was appointed lead developer on the Zambia Lobito rail corridor project in collaboration with the United States Government, the European Union, the African Development Bank and the governments of Angola, the Democratic Republic of Congo and Zambia.
“We are pleased to partner with Africa Finance Corporation on this transformative project which will deepen our nation’s role as a regional logistics hub, boosting trade not only with Zambia but with the rest of the world,” the Minister of Transport for Angola Ricardo Viegas d’Abreu said.
The project involves the construction of approximately 800 km greenfield rail line connecting the Benguela rail line in Luacano, Angola, to the existing Zambia Railways Line in Chingola, Zambia. Once completed, the trade corridor will facilitate the efficient movement of goods and promote investments in agriculture, health, digital infrastructure, mining, and electricity access along the corridor.
“The Zambia Lobito rail corridor project is an important milestone in our efforts to modernise infrastructure, enhance the competitiveness of our economy, and improve the livelihoods of our people. We look forward to partnering with Africa Finance Corporation to deliver on this groundbreaking project,” Frank Tayali, the Minister of Transport for Zambia said.
Concurrent to signing the concession agreements, AFC also signed an agreement to receive USD 2 million grant funding from the United States Trade and Development Agency (USTDA), towards completion of the environmental and social studies for the project.
The agreement between AFC and USTDA has been signed on September 24, 2024, and the grant, which marks the first time the AFC will tap into USTDA funding, will facilitate comprehensive Environmental and Social Impact Assessments (ESIA) to ensure that the Zambia Lobito rail project aligns with international best practices and environmental standards.
AFC will play the pivotal role of lead developer on the rail project which not only offers an efficient evacuation route for minerals and metals from the region but helps establish a trade corridor across Africa from the Port of Lobito on the coast of the Atlantic Ocean to the Port of Dar es Salam in Tanzania on the coast of the Indian Ocean, facilitating global and intra-African trade.
“The Zambia Lobito rail project represents a game-changing development for the region, unlocking tremendous potential for trade, industrialisation, and socio-economic growth,” Samaila Zubairu, President of Africa Finance Corporation.
Also in September 2024, the Development Bank of Southern Africa approved a USD 200 million grant for the development of Lobito rail project on the Angola’s territory, alongside the U.S. International Development Finance Corporation (DFC).
The railway is expected to create economic benefit of approximately USD 3 billion across both countries, reduce emissions by approximately 300,000 tonnes per year and add over 1,250 jobs across construction and operations.
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