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Partners of Lobito Corridor target construction completion in five years

31st October 2023

By: Marleny Arnoldi

Deputy Editor Online

     

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Following the signing of a seven-sided memorandum of understanding (MoU) between two financial institutions and the governments of the US, the European Union, Angola, the Democratic Republic of Congo (DRC) and Zambia for the development of the Lobito Corridor and the Zambia-Lobito rail line, a coordinator involved in the project has confirmed that a feasibility study will start before the end of the year.

Acting special coordinator for the Partnership on Global Infrastructure Investment (PGI) Helaina Matza told members of the media during a briefing on October 31 that the partners aimed to conclude the feasibility study within six months and thereafter start with construction of the massive project.

The project partners are targeting completion of the works within five years.

The funding partners on the project are the African Development Bank (AfDB) and the Africa Finance Corporation (AFC).

This endeavour marks the most significant transport infrastructure that the US has helped to develop in Africa in a generation.

The agreement builds the Lobito Corridor Transport Facilitation Agency Agreement signed by the three African governments in January, which relates to accelerated growth in trade along the corridor through harmonised trade instruments, stronger coordination of development activities and more effective participation of small and medium-sized enterprises in value chains.

The works entail the construction of a 550 km rail line in Zambia from the Jimbe border to Chingola in the Zambian Copperbelt, as well as 260 km of main feeder roads within the corridor.

Although a rough cost estimate of $1-billion has been communicated, Matza said the feasibility study would contain a more accurate estimation.

When completed, the programme will expand an economic corridor connecting the host countries to global markets to enhance regional trade and growth, and advance the shared vision of connected, open-access rail from the Atlantic Ocean to the Indian Ocean.

The AfDB alone plans to contribute $500-million to the project through a blend of sovereign and non-sovereign instruments, including concessional allocations.

The AFC will serve as the overall project developer and facilitate the preparation stage of the Zambia-Lobito rail line. Importantly, Matza explained that because AFC had been selected as the project operator, it would be undertaking professional management and training towards the operation and management of the Lobito Corridor and all related infrastructure.

The project would be built and run on commercial terms, Matza added, in response to concerns raised by media outlets about the project being neglected in terms of maintenance after a few years, as had been the case with some other major foreign-invested infrastructure projects on the continent.

Responding to another question of whether the new rail line would connect with other existing railway lines, such as those having been developed by Chinese investors, Matza affirmed that the Lobito Corridor partners were operating in a way that was transparent and useful for the countries involved, to ensure maximum economic benefits for all stakeholders, including society.

She also assured that the project was being developed with high environmental standards in mind, as the AfDB and the AFC would normally ensure with their financing projects. Where existing infrastructure is located, the partners will use existing environmental studies to help inform development, while thorough greenfield studies will be done in new undeveloped areas.

The Lobito Corridor is expected to facilitate regional integration and grow trade across the countries of Angola, Zambia and the DRC and beyond. The AfDB is confident the corridor will attract investments in digital access, clean energy supply chains, and agricultural value chains, which will ultimately increase regional competitiveness and trade within the context of the African Continental Free Trade Area.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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