Zambia Lobito railway concession has been finalized
The governments of Angola and Zambia have recently formalized concession agreements with the Africa Finance Corporation (AFC). This significant step marks the commencement of the construction phase for an extensive 800-kilometer railway link, which will serve as a vital connection between the two African nations.
These comprehensive agreements, which detail the financing, construction, ownership, and operation of the new railway, were officially signed in a ceremony that took place in New York on September 24. This event was strategically timed to coincide with the United Nations General Assembly and was presided over by the US Secretary of State, Antony Blinken. The project has received backing from the Biden Administration’s G-7 Partnership for Global Infrastructure & Investment, underlining its global importance and potential impact.
The ambitious project, known as the Zambia Lobito Rail Project, involves the construction of a railway line that will cut through Zambia’s northwestern provinces. This line will serve as a bridge, connecting Angola’s Benguela Railway at Luacano with the Zambia Railways network at Chingola. This strategic linkage will provide the most direct and efficient route for exports and imports, effectively connecting key mining regions, agricultural centers, and businesses in northern Zambia and the southern DRC to the port of Lobito. Samaila Zubairu, the CEO of AFC, emphasized that the exports would include copper and other vital minerals that are crucial for the global energy transition.
The proposed railway, which is expected to meet world-class standards, is projected to deliver substantial economic benefits, estimated at approximately US$3bn, across both countries. In addition to the economic benefits, the project is also expected to contribute significantly to environmental sustainability by reducing annual carbon emissions by approximately 300,000 tonnes per year. Moreover, it is anticipated to create over 1,250 jobs during the construction and operation phases of the line.
Upon its completion, the railway line will become an integral part of a trade corridor that spans across Africa, stretching from the Atlantic coast to the Tanzanian port of Dar es Salaam on the Indian Ocean. This corridor will facilitate both global and intra-African trade and stimulate investment in various sectors such as agriculture, health, digital infrastructure, mining, and electricity supply.
In the previous year, AFC was appointed as the lead developer for the project. They are working in close collaboration with the US government, the European Union, the African Development Bank, and the governments of Angola, DR Congo, and Zambia.
The formalization of the concession agreements was accompanied by the release of a US$2m grant from the US Trade & Development Agency. This grant will fund comprehensive environmental and social impact assessments for the project, ensuring that it aligns with international best practices and environmental standards.
Ricardo Viegas d’Abreu, Angola’s Minister of Transport, expressed his satisfaction at partnering with Africa Finance Corp on this transformative project. He believes it will enhance their nation’s role as a regional logistics hub, boosting trade not only with Zambia but with the rest of the world. His Zambian counterpart, Frank Tayali, echoed these sentiments, adding that this groundbreaking project was a significant milestone in their efforts to modernize infrastructure, enhance the competitiveness of their economy, and improve the livelihoods of their people.
