Zambia Railways Appoints Transaction Advisor to Raise US$60 Million for Track Rehabilitation Project

Zambia Railways Limited (ZRL) has appointed Pangaea Securities as Transaction Advisor to raise US$60 million from Development Finance Institutions (DFIs) and the private sector to complement the €50 million grant provided under the European Union (EU) Railway Sector Support Programme (RSSP).

The funding will support the rehabilitation of critical sections of ZRL railway infrastructure, signalling, and communication systems.

The financing support derives from ZRL’s Strategic Business Plan (SBP) for 2024 – 2028, aiming to increase annual freight haulage from 800,000 tonnes in 2024 to 2.6 million tonnes by 2028. Phase 1 of the SBP involves a capital investment of USD 113 million to improve infrastructure and signalling systems.

The RSSP forms part of Zambia’s broader objective to strengthen rail transport as a strategic national asset, improve freight efficiency, and enhance regional trade competitiveness and follows on from previous efforts to rehabilitate ZRL railway infrastructure, dating back to the 1980s, with support from multilateral donors. The improvements are expected to directly translate into increased revenues for ZRL, as operational efficiency and service reliability attract more customers and users of rail as a preferred mode of transport. The action will bolster the railways’ competitive position in Zambia, potentially drawing more business and fostering economic development. Enhanced rail services will support Zambia’s economic growth by facilitating more efficient trade routes and promoting regional connectivity.

Speaking during the contract signing ceremony between ZRL and Pangaea Securities, ZRL Managing Director Engineer Cuthbert Malindi described the partnership as a milestone in securing additional capital from funders required to deliver on the EU-supported track rehabilitation project.

Eng Malindi said railway transformation all over the world requires collaboration between the public and private sectors, and the partnership with Pangaea Securities demonstrates ZRL’s commitment to working closely with the private sector to unlock additional financing solutions.

“By bringing on board Pangaea Securities, we are leveraging private sector expertise to help us optimally structure and mobilise the additional financing required to complement the EU grant. Partnering with Pangaea Securities allows us to structure bankable transactions and attract credible patient capital, while accelerating the implementation of our rehabilitation agenda. Public-private collaboration is essential in bridging funding gaps and ensuring sustainability,” noted Malindi.

Eng. Malindi also highlighted other key initiatives ZRL is undertaking to enhance operational efficiency and rolling stock capacity creation through hire and remanufacturing of locomotives and wagons.

“In simple terms, Zambia Railways Limited today can be likened to a stool with three broken legs. These legs represent rolling stock as the first leg, railway track infrastructure as the second leg and operational efficiencies as the third leg. For the stool to stand firm and balanced, all three legs must be fixed, comprehensively and simultaneously. This is the approach we are taking,” said Malindi.

The ZRL Managing Director thanked the EU, the Government of the Republic of Zambia through the shareholder – the Industrial Development Corporation (IDC), the Board of Directors and other key stakeholders for the unwavering support to ZRL.

Meanwhile, Pangaea Securities Chief Executive Officer Ceasar Siwale said the firm is fully committed to applying its expertise, networks and experience to ensure that the additional US$60 million target is successfully mobilised to support the EU-backed project.

“We are particularly excited to be part of this journey with Zambia Railways Limited. Over the years, Pangaea has built a strong reputation as a trusted financial advisory firm specialising in infrastructure financing, capital mobilisation and transaction structuring across the region. Our core strength lies in our ability to identify the right sources of capital, structure bankable transactions and engage effectively with a wide network of financiers,” said Siwale.

The European Union grant-funded track rehabilitation project was designed to rehabilitate critical sections of the railway infrastructure, with the objective of restoring safety, improving reliability and enhancing the overall efficiency of rail operations in Zambia.