US-Backed Angola Rail Plan Gets $200M From Regional Development Bank

AFRICAN BUSINESS AND ECONOMYSeptember 3, 2024 at 3:16 PM UTC

TLDR

DBSA approves $200 million financing for Lobito corridor rail project transporting critical minerals from Central Africa to Angola's Atlantic port
US International Development Finance Corp provides $553 million funding for the project supporting the global energy transition
Railway project integral for exporting essential minerals like copper and cobalt crucial for renewable energy technologies

The Development Bank of Southern Africa (DBSA) has approved up to $200 million in financing for the Lobito corridor rail project, a US-backed initiative aimed at transporting critical minerals from Central Africa's copper belt to Angola's Atlantic port.

The project, supported by the US International Development Finance Corp with $553 million in funding, is integral to facilitating the export of essential minerals like copper and cobalt, crucial for renewable energy technologies.

Mpho Mokwele, DBSA executive for transacting, stated that the railway is a key component of efforts to support the global energy transition by creating a more efficient and cost-effective route for exporting these minerals.

Key Takeaways

The Lobito corridor is expected to become the most competitive pathway, offering significant savings in both cost and time for exporters. The railway will be operated under a 30-year concession by a consortium that includes commodities trader Trafigura Group and Portuguese construction firm Mota Engil SGPS SA. The project aligns with US strategic interests in securing access to critical minerals while increasing its influence in a region where China has historically dominated. Concurrently, China is negotiating a deal to upgrade and take over the rail line connecting Zambia’s copper mines to the Indian Ocean port of Dar es Salaam.

Angola

Economy

US DFC

Lobito Corridor Project

DBSA

Copper

Cobalt