After a seven-party memorandum of understanding was signed between two financial institutions and the governments of the US, the European Union, Angola, the Democratic Republic of Congo (DRC), and Zambia to support the development of the Lobito Corridor and the Zambia-Lobito rail line, the project’s coordinator confirmed that a feasibility study would kick off by the end of the year. Helaina Matza, who serves as the Acting Special Coordinator for the Partnership on Global Infrastructure Investment (PGI), stated during an October 31 press conference that the partners were committed to completing the feasibility study in six months, followed by the commencement of the substantial project’s construction.
The African Development Bank (AfDB) and the Africa Finance Corporation (AFC) are the financial partners of this project.
This project represents the largest transport infrastructure initiative that the United States has contributed to in Africa in decades.
This agreement complements the Lobito Corridor Transport Facilitation Agency Agreement, which was previously signed by three African governments in January. This agreement aims to boost trade growth along the corridor by streamlining trade procedures, improving coordination of development activities, and involving small and medium-sized enterprises more effectively in value chains.
The project involves the construct”on of a 550 km railway line in Zambia, stretching from the Jimbe border to Chingola in the Zambian Copperbelt, as well as the development of 260 km of primary feeder roads within the corridor.
Construction cost for the construction of Lobito Corridor
While there’s been a ballpark figure of around $1 billion mentioned, Matza mentioned that the feasibility study will provide a more precise cost estimate.
Once this project is finished, it will extend an economic corridor that links these countries to the global markets, promoting regional trade and growth. It aligns with the vision of establishing a connected, open-access railway from the Atlantic Ocean to the Indian Ocean.
The African Development Bank (AfDB) is set to play a significant role by contributing $500 million to the project, using a combination of sovereign and non-sovereign financial instruments, which may include concessional allocations.
The Africa Finance Corporation (AFC) will take on the role of overseeing the entire project’s development and handling the initial stages of the Zambia-Lobito rail line. It’s worth noting that AFC’s role as the project operator means they’ll provide professional management and training to ensure the effective operation and maintenance of the Lobito Corridor and all its associated infrastructure.
Matza emphasized that the project is designed to operate on commercial terms. This addresses concerns raised by the media about potential neglect in terms of maintenance, a problem that has affected some other major foreign-invested infrastructure projects in Africa over the years.
Regarding the connection of the new rail line to existing railways, including those developed by Chinese investors, Matza assured that the Lobito Corridor partners are committed to transparency and mutual benefit for the countries involved. Their aim is to maximize economic benefits for all stakeholders, including the local communities.
She also highlighted the project’s commitment to high environmental standards, a common practice for financing projects by the AfDB and the AFC. Existing environmental studies will guide development in areas with existing infrastructure, while comprehensive greenfield studies will be conducted in new, undeveloped areas.
The Lobito Corridor Is expected to foster regional integration and boost trade among Angola, Zambia, the DRC, and beyond. The AfDB is confident that this corridor will attract investments in digital access, clean energy supply chains, and agricultural value chains, ultimately enhancing regional competitiveness and trade within the framework of the African Continental Free Trade Area.