AFC Secures Agreements with Angola and Zambia for the Zambia Lobito Rail Project

The Africa Finance Corporation has signed critical agreements with Angola and Zambia to develop the Zambia Lobito Rail Project, enhancing trade routes and facilitating economic growth through improved connectivity to international markets. This initiative aims to significantly boost cargo movement from Zambia, create thousands of jobs, reduce emissions, and attract investment across various sectors, while being backed by USTDA funding for environmental studies.

The Africa Finance Corporation (AFC) has formalized concession agreements with the governments of Angola and Zambia, aimed at facilitating the financing, construction, ownership, and operation of the Zambia Lobito Rail Project. This corridor is designed to serve as a strategic alternative route to international export markets for Zambia as well as the Democratic Republic of Congo (DRC), efficiently linking vital mining areas, agricultural zones, and commercial enterprises to the Port of Lobito. The Lobito Rail Project promises to significantly enhance cargo movement from Zambia’s Copperbelt and Northwestern Provinces, traversing through Angola to reach Western markets. The signing took place on September 24 during a ceremonial event attended by U.S. Secretary of State Antony J. Blinken, representing the Biden Administration’s G-7 Partnership for Global Infrastructure and Investment during the 79th session of the United Nations General Assembly (UNGA 79). Furthermore, the AFC has been selected as the lead developer for this rail initiative in collaboration with various stakeholders, which include the U.S. Government, the European Union, the African Development Bank, and the governments of Angola, DRC, and Zambia. The project encompasses the construction of approximately 800 kilometers of new railway, linking the Benguela rail line in Luacano, Angola, to the existing Zambia Railways Line in Chingola, Zambia. Upon conclusion, this trade corridor is expected not only to facilitate the smooth movement of goods but also to stimulate investments in crucial sectors such as agriculture, healthcare, digital infrastructure, mining, and electricity access. Concurrently with the concession agreements, AFC signed an agreement to secure $2 million in grant funding from the U.S. Trade and Development Agency (USTDA), earmarked for the completion of environmental and social assessments crucial for the project’s alignment with international standards. The grants signify the AFC’s engagement with USTDA funding for the first time, ensuring that the Zambia Lobito Rail Project adheres to comprehensive Environmental and Social Impact Assessments (ESIA). The AFC has articulated its commitment to spearheading this extensive rail project, which serves as a pivotal route for transporting minerals and metals from the region while establishing an expansive trade corridor across Africa stretching from the Port of Lobito to the Port of Dar es Salaam in Tanzania. The socioeconomic implications of the Lobito corridor are projected to result in about $3 billion in economic benefits for both Angola and Zambia, with an anticipated reduction of 300,000 tons in emissions per annum and the generation of over 1,250 jobs across construction and operational phases. Angolan Minister of Transport Ricardo Viegas d’Abreu emphasized, “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…” Zambian Minister of Transport Frank Tayali reflected on the significance of the project in modernizing infrastructure and enhancing economic competitiveness. AFC President & CEO Samaila Zubairu described the initiative as a transformative development that unveils substantial prospects for trade and socio-economic advancement across the region. In summary, the Zambia Lobito Rail Project signifies a critical milestone in the regional integration and infrastructure development landscape, positioning Angola and Zambia as key players in global and intra-African trade dynamics.

The Zambia Lobito Rail Project is an essential infrastructure initiative aimed at enhancing trade and economic connectivity between Zambia, Angola, and the DRC. By establishing an efficient rail link, the project seeks to streamline cargo transportation between mining regions and agricultural areas to international markets, thereby fostering socio-economic development in the region. This partnership involving multiple stakeholders, including international bodies such as the U.S. Government and African financial institutions, underscores a collaborative effort to bolster African infrastructure. The project not only aims to modernize regional transport networks but also emphasizes adherence to environmental sustainability through comprehensive impact assessments.

The AFC’s signing of concession agreements for the Zambia Lobito Rail Project stands as a pivotal development in enhancing regional trade infrastructure. This initiative is poised to create significant economic benefits, promote sustainable practices, and foster interconnectivity between Angola, Zambia, and global markets, ultimately aiding the socio-economic upliftment of the involved nations.

Original Source: www.esi-africa.com