AFC Signs Landmark Concession Agreements for Zambia Lobito Rail Project

New York, 25 September 2024 – Africa Finance Corporation (AFC) has finalized concession agreements with the governments of Angola and Zambia to advance the Zambia Lobito Rail Project, a key infrastructure initiative set to transform regional trade and connectivity. Signed during a ceremony hosted by U.S. Secretary of State Antony J. Blinken and the Biden Administration’s G-7 Partnership for Global Infrastructure and Investment (PGI) on the sidelines of the UN General Assembly, the agreements mark a critical step in the financing, construction, ownership, and operation of this ambitious rail project.

The project, which AFC was appointed to lead last year, involves the construction of an 800km greenfield rail line connecting the existing Benguela rail line in Luacano, Angola, to Zambia Railways in Chingola. Once completed, this route will serve as a key trade corridor, facilitating the efficient movement of goods and promoting investments across key sectors such as agriculture, health, digital infrastructure, mining, and energy access.

At the signing, AFC also secured a US$2 million grant from the United States Trade and Development Agency (USTDA) to conduct Environmental and Social Impact Assessments (ESIA) to ensure the project meets international environmental standards. This marks the first time AFC will utilize USTDA funding to complete these critical studies, demonstrating its commitment to sustainable infrastructure development.

The Zambia Lobito Rail Project is set to have a far-reaching impact on the region’s economy. It will provide a vital export route for copper and other minerals from Zambia and the Democratic Republic of Congo (DRC), while also enabling trade flows across Africa by linking the Port of Lobito on Angola’s Atlantic coast to the Port of Dar es Salaam on Tanzania’s Indian Ocean coast. The project is expected to generate $3 billion in economic benefits, reduce annual emissions by 300,000 tons, and create over 1,250 jobs during its construction and operation phases.

AFC President and CEO, Samaila Zubairu, emphasized the transformative nature of the project. “The Zambia Lobito Rail Project represents a game-changing development for the region, unlocking tremendous potential for trade, industrialisation, and socio-economic growth. AFC is proud to partner with the governments of Angola and Zambia to deliver world-class rail infrastructure, which will accelerate industrial development in Africa, promote regional integration, and provide a vital export route for copper and other critical minerals for the global energy transition.”

Angola’s Minister of Transport, Ricardo Viegas d’Abreu, echoed this sentiment, stating, “We are pleased to partner with Africa Finance Corporation on this transformative project which will deepen our nation’s role as a regional logistics hub, boosting trade not only with Zambia but with the rest of the world.”

Zambia’s Minister of Transport, Frank Tayali MP, also emphasized the significance of the project, saying, “The Zambia Lobito Rail Project is an important milestone in our efforts to modernize infrastructure, enhance the competitiveness of our economy, and improve the livelihoods of our people.”

Once operational, the railway will provide the shortest route for imports and exports, linking key mining regions and agricultural hubs in Zambia and the DRC to international markets. By providing a strategic alternative for cargo movement, the project will reduce logistical costs and improve trade efficiencies, particularly for the mineral-rich Copperbelt and Northwestern Provinces.

With construction set to begin following the financial close, AFC’s leadership of the Zambia Lobito Rail Project is expected to drive significant economic growth while contributing to the region’s broader goals of sustainable development and infrastructure modernization.