The Lobito Corridor development in Zambia has gained major structural momentum, backed by international development institutions and Western trade initiatives aiming to secure Atlantic export routes for critical minerals like copper and cobalt.
The African Development Bank (AfDB) approved a major financing package consisting of a $255 million loan and a $10 million grant specifically designated to advance Zambia’s section of the Lobito Economic Corridor. This funding is part of a multi-billion-dollar western effort, supported by the U.S. International Development Finance Corporation (DFC) under the G7 Partnership for Global Infrastructure and Investment (PGI) and the European Union’s Global Gateway, to upgrade regional connectivity. For landlocked Zambia, the corridor involves rehabilitating existing lines toward the Democratic Republic of Congo and constructing a new rail spur connecting Zambia’s North-Western and Copperbelt provinces (near Chingola) directly to the Angolan border at Luau.
By establishing a direct rail line to the Atlantic port of Lobito in Angola, Zambia aims to significantly bypass long, congested truck routes to eastern and southern African ports, dramatically cutting transit times and transport costs for its mineral exports. The initiative unfolds alongside competing geopolitical moves in the region, including China’s $1.4 billion modernization deal for the TAZARA railway, which links Zambia’s Copperbelt eastwards to the Indian Ocean port of Dar es Salaam in Tanzania.
October 27, 2024
The Zambia Lobito rail project represents a significant turning point. AFC was named the primary developer of the Zambia Lobito rail project last year in partnership with the governments of Angola, the Democratic Republic of the Congo, Zambia, the United States, and the European Union. On the 79th United Nations General Assembly, hosted by the US Secretary of State Antony J. Blinken, the new agreements were signed to cover the project’s financing. The agreement also covered its construction, ownership, and operation. Electrical access along the corridor is also expected to increase. This will, in turn, encourage mining, agriculture, and health. The connection between important mining areas, agricultural hubs, and companies in Zambia and the Democratic Republic of the Congo with the Port of Lobito is also expected. This will provide the quickest path for imports and exports.
State of affairs on the Zambia Lobito Rail project
The Zambia Lobito Rail project is expected to increase the efficiency of the transportation of products. In addition, it will encourage investments in digital infrastructure. A Greenfield rail line of around 800 km will be built as part of this project. The line will connect the Zambia Railways Line in Chingola with the Benguela rail line in Luacano. The corridor will offer a different strategic path to global export markets for Zambia and the DRC. It will greatly ease the transportation of goods from the Northwestern Provinces and Copperbelt to the Western markets via Angola.
The agreement highlights the corporation’s beginning to lead and finish the railway development. AFC also signed an agreement to receive $2 million in grant funding from the United States Trade and Development Agency. The funds will be channeled toward completing the project’s environmental and social studies. Relevant entities also aim to ensure that the Zambia Lobito rail project aligns with the environmental standards. They aim to achieve this through comprehensive environmental and social impact assessments facilitated by the grant.
Also read:
The Lobito Corridor Railway Expansion Project
Significance of the Rail Project
The Zambia Lobito rail project provides an effective evacuation route for minerals and metals from the region. AFC is pleased to collaborate with the governments of Angola and Zambia to build world-class rail infrastructure to expedite Africa’s development. It also aims to foster regional integration and provide a crucial export route for copper and other essential minerals for the global energy transition. The project has the prospect of coming up with over $3 billion in economic returns for both countries. It also aims to offer more than 1250 jobs during construction and operation.
Furthermore, 300,000 tons of emissions will be reduced annually. The country is eager to work with Africa Finance Corporation to complete this innovative initiative. AFC will play a pivotal role in ensuring both international and intra-regional trade. They aim to do this by helping to build a trade corridor across Africa from the port of Lobito on the Atlantic Ocean coast to the port of Dares Salam in Tanzania on the Indian Ocean coast. Samaila Zubairu, Africa Finance Corporation president and chief executive officer, stated, “A revolutionary development for the area, the Zambia Lobito rail project opens up enormous possibilities for trade, industrialization and socioeconomic advancement.”
Project Factsheet: Zambia Lobito Rail Extension (Greenfield Spur)
Project Name: Zambia-Lobito Rail Extension (Zambia-Angola Greenfield Rail Line)
Lead Developer: Africa Finance Corporation (AFC) (under a Public-Private Partnership model)
Total Greenfield Rail Length: 800–829 km (550 km in Zambia; 279 km in Angola)
Key Termini and Route: Chingola (Copperbelt Province, Zambia) via Solwezi & Mwinilunga to Luacano (Angola)
Primary Target Cargo: Copper, cobalt, agricultural produce, and general freight
Key Financiers and Partners: African Development Bank (AfDB), US International Development Finance Corporation (DFC), European Union (Global Gateway), and Italy (Mattei Plan)
Estimated Total Investment: $1.6 Billion total corridor commitment
Strategic Impact: Gives landlocked Zambia direct Atlantic port access via Angola, cutting export transit times to 3 days and reducing dependence on congested southern and eastern ports.
Project Team
Lead Developer and Consortium Sponsor
- Africa Finance Corporation (AFC): Appointed lead project developer, coordinating the overall project structuring, fundraising, and private-public partnership execution.
National Governments and Rail Authorities
- Government of Zambia (via Ministry of Transport): Joint concession authority overseeing the construction and operation of the ~550 km Zambian section.
- Government of Angola: (via Ministry of Transport): Joint concession authority managing the 279 km Angolan extension and port connectivity.
- Zambia Railways Limited (ZRL): Zambian state rail operator connecting the new greenfield spur to the existing Copperbelt network.
Lead Financing and Development Institutions
- African Development Bank (AfDB): Major multilateral anchor funder providing loans and grants to anchor the corridor development.
- U.S. International Development Finance Corporation (DFC): Core Western strategic sponsor backing the extension through G7’s Partnership for Global Infrastructure and Investment (PGI).
- European Union (EU): Development partner supporting environmental studies and trade facilitation under its Global Gateway initiative.
- U.S. Trade and Development Agency (USTDA): Grant financing partner conducting Environmental and Social Impact Assessments (ESIA).
- Cassa Depositi e Prestiti (CDP / Italy): Financing partner providing backing via Italy’s Mattei Plan Financing Facility.
Offtakers and Mining Partners
- Regional Mining Operators: Key global mining companies in Zambia’s Copperbelt and North-Western provinces (holding initial freight commitments for over 1 million tonnes annually).
Also read:
US$1.3 Billion Lobito Corridor Development Deal Signed by Angola
Tanzania’s Lobito Corridor Plan
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