DBSA Approves $200 Million for Angola’s Lobito Corridor Railway Project

Johannesburg, 3 September 2024 — The Development Bank of Southern Africa (DBSA) has approved funding of up to $200 million towards the Lobito Corridor Railway Project in Angola, in collaboration with the U.S. International Development Finance Corporation (DFC). The $786.4 million infrastructure initiative aims to enhance regional trade and improve transportation networks by establishing a reliable railway link from Angola’s Lobito Port to the border with the Democratic Republic of Congo (DRC). This project is expected to have a significant impact on economic activity in the region, particularly for the export of minerals from the DRC.

The Lobito Corridor Railway Project will involve the finance, build, operate, and transfer (FBOT) of a 1,289 km railway line stretching from Lobito on Angola’s Atlantic coast to the Luau border with the DRC. Additionally, a 28 km railway branch line from Negrao to Bimbas will be developed. This infrastructure is expected to significantly boost cargo transport capacity, facilitating the movement of international and domestic goods across Angola and into neighboring countries. The project is scheduled to begin construction soon, following the financial close, after a concession agreement was signed in November 2022.

The DBSA’s investment in this railway project aligns with its broader mission to support infrastructure development in Southern Africa, focusing on transport systems including roads, bridges, railways, and ports. The railway will play a key role in improving the logistics framework of the region, potentially transforming Angola and the DRC’s economic landscape by making the transport of copper, cobalt, and other essential goods more efficient.

DBSA Group Executive for Transacting, Mpho Mokwele, emphasized the importance of the project for regional development. “Our support for the Lobito Corridor Railway Project aligns with our mission to drive sustainable economic growth and regional integration in Southern Africa, not forgetting building Africa’s prosperity,” said Mokwele.

One of the most critical aspects of the Lobito Corridor Railway Project is its potential to support the energy transition by facilitating the export of critical minerals required for renewable energy technologies. By linking the mineral-rich areas of the DRC with Angola’s Lobito Port, the corridor is expected to become a highly competitive route for mineral exports, offering significant cost and time savings for exporters.

Mohan Vivekanandan, DBSA’s Group Executive for Coverage, highlighted the broader impact on regional trade. “The project will not only enhance the economic prospects of Angola and the DRC but also foster greater connectivity and trade across the Southern African Development Community (SADC),” said Vivekanandan.

The DBSA’s commitment to the project also includes efforts to boost local content and economic development. Approximately 50% of the required wagons for the railway will be procured from a South African local manufacturing company, supporting local industry and job creation. The Lobito Corridor Railway is seen as a critical piece of infrastructure that will contribute to job creation, trade expansion, and regional economic growth.

The DBSA remains focused on infrastructure projects that drive sustainable development and improve the quality of life in Southern Africa. By investing in the Lobito Corridor Railway, the Bank is reinforcing its role as a key player in the region’s economic transformation.