AFC Hoping For Financial Close For Zambia-Lobito Rail Project Within Two Years

The Africa Finance Corporation (AFC), which recently signed concession agreements with the governments of Angola and Zambia to advance the Zambia-Lobito Rail Project, has stated that the monetary terms of the agreements are yet to be finalised, as the project has not yet gone through the contractor procurement process.

Yewande Thorpe, Associate Vice President of Marketing and Communications, noted in an interview that the project is still in its early stages and is aiming to reach financial close within 24 months. In terms of construction timelines, while the preferred contractor will ultimately confirm the schedule, the AFC estimates it will take 3-5 years to fully complete construction, Thorpe said.

Thorpe emphasized that the AFC is dedicated to supporting transformative projects like the Lobito Rail.

The official said the project goes beyond the traditional mine-to-port model by establishing an economic corridor that will generate significant economic benefits, facilitating growth in multiple sectors such as mining, manufacturing, agriculture, logistics, petroleum products, telecoms, and fibre infrastructure.

Additionally, it aims to foster local development, reduce greenhouse gas emissions, and create jobs along the corridor, Thorpe said.

Thorpe highlighted that the lack of infrastructure places Zambia and the southern African region at an economic disadvantage, limiting their competitiveness in the global market.

Last year, AFC was appointed lead developer for the Zambia-Lobito rail project in collaboration with the U.S. Government, the European Union, the African Development Bank, and the governments of Angola, the Democratic Republic of Congo, and Zambia.

This project involves constructing an approximately 800 km greenfield rail line connecting the Benguela rail line in Luacano, Angola, to the Zambia Railways line in Chingola, Zambia, with an anticipated economic impact of around US$3 billion across both countries. AFC, which has 43 member countries, has invested US$13 billion across Africa since its inception.

Thorpe also mentioned AFC’s past infrastructure projects across Africa, including the MetroKin Rail Project in Kinshasa, Mahathi Petroleum Product Transportation in Uganda, and the Takoradi Port Project in Ghana. Other notable projects include the Bakwena Toll Road in South Africa and the Henri Konan Bédié Bridge in Abidjan, Côte d’Ivoire.

The MetroKin Rail Project, in partnership with Trans Connexion Congo (TCC), involves the development of a mass transit system covering over 300 km of railway. The project will be completed in four phases, starting with the modernization of a 25 km line from Kinshasa’s central station to N’Djili International Airport. AFC has committed an initial investment of US$3 million for this project’s development phase, aiming for financial closure soon.

In Uganda, AFC invested US$95.25 million in Mahathi Infra Uganda Limited, a major player in East Africa’s oil and gas downstream sector. This investment will fund the construction of two self-propelled barges on Lake Victoria, offering a more efficient and less carbon-intensive alternative to traditional trucking.

In 2019, AFC committed up to US$138 million in equity and debt for the Takoradi Port Expansion Project in Ghana.

Written for Railways Africa Magazine by Chamwe Kaira

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