Infrastructure financier Africa Finance Corporation (AFC) has signed concession agreements with the governments of Angola and Zambia for the financing, construction, ownership and operation of the Zambia Lobito rail project.

The agreements pave the way for AFC to spearhead and complete the development of the railway. The agreements were signed on September 24 in a ceremonial signing hosted by US Secretary of State Antony J Blinken and the Biden Administration’s G7 Partnership for Global Infrastructure and Investment (PGI) on the sidelines of the seventy-ninth session of the UN General Assembly.

“We are pleased to partner with AFC 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,” Angola Transport Minister Ricardo Viegas d’Abreu said at the signing.

Last year, AFC was appointed lead developer on the Zambia Lobito rail project in collaboration with the US government, the EU, the African Development Bank and the governments of Angola, the Democratic Republic of Congo and Zambia.

The project involves the construction of about 800 km of greenfield rail line connecting the Benguela rail line in Luacano, Angola, to the existing Zambia Railways line in Chingola, Zambia.

Once completed, the trade corridor will facilitate the movement of goods and promote investments in agriculture, health, digital infrastructure, mining and electricity access along the corridor.

“The Zambia Lobito rail project is an important milestone in our efforts to modernise infrastructure, enhance the competitiveness of our economy and improve the livelihoods of our people,” Zambia Transport Minister Frank Tayali said.

Concurrent to signing the concession agreements, AFC also signed an agreement to receive $2-million grant funding from the US Trade and Development Agency (USTDA) towards completion of the environmental and social studies for the project.

The grant, which marks the first time the AFC will tap into USTDA funding, will facilitate environmental- and social-impact assessments to ensure the Zambia Lobito rail project aligns with international best practices and environmental standards.

AFC will play the role of lead developer on the rail project, which will establish an efficient evacuation route for minerals and metals from the region and help establish a trade corridor across Africa from the Port of Lobito on the coast of the Atlantic Ocean to the Port of Dar es Salam in Tanzania on the coast of the Indian Ocean, facilitating global and intra-African trade.

The railway is expected to create an economic benefit of about $3-billion across both countries, reduce emissions by about 300 000 t/y and add more than 1 250 jobs across construction and operations.

“The Zambia Lobito rail project represents a game-changing development for the region, unlocking tremendous potential for trade, industrialisation and socioeconomic growth.

“[It] 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,” AFC president and CEO Samaila Zubairu said.

The corridor is expected to provide an alternative strategic route to international export markets for Zambia and DRC. It will offer the shortest route for export and imports, linking key mining regions, agricultural clusters and businesses in Zambia and DRC to the Port of Lobito.

It is expected to facilitate the movement of cargo from the Copperbelt through Angola to Western markets.