The Development Bank of Southern Africa has approved funding of up to $200 million for the Lobito Corridor Railway Project, the DBSA has announced.
The funding for the much-vaunted rail freight link between the port in Angola’s Benguela Province and the Democratic Republic of the Congo (DRC), was secured alongside the US International Development Finance Corporation.
A statement issued by the DBSA said: “This strategic infrastructure initiative, valued at approximately $786.4 million, aims to enhance regional trade and transportation networks by providing an efficient and reliable railway connection from the Lobito Port on Angola’s Atlantic coast to the border with the DRC.
“The Bank’s function within the transport sector is to pursue infrastructure investment for projects tailored for the development of bridges, roads, bus stations, railways, terminals, airports, seaports, border ports and more.
“The Lobito Corridor Railway Project entails the finance, build, operate and transfer (FBOT) of a 1 289 kilometre brownfield railway main line from Lobito to Negrao and Luau border, as well as a 28km railway branch line from Negrao to Bimbas.
“The project is expected to boost cargo transport, allowing large flows of international goods in transit and national goods in internal circulation.
“The Concession Agreement for the Lobito Corridor Railway Project was signed in November 2022, and construction is expected to take place imminently.
“The funding of this project is an important step towards improving the logistics framework in Southern Africa.”
The DBSA said by supporting the Lobito Corridor, the bank not only invested in critical infrastructure but also fostered economic opportunities and job creation in both Angola and the DRC.
“The project aligns with the commitment to sustainable development and regional cooperation.
“This project is poised to be a game-changer for the region, providing a critical link for the transport of copper, cobalt, and other essential goods from the mineral-rich areas of the DRC to international markets via the Lobito Port.”
Mpho Mokwele, group executive for transacting at DBSA, said: "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.”
The DBSA statement also noted that: “The railway line is part of a broader strategy to support the energy transition by facilitating the export of critical minerals needed for renewable energy technologies. The Lobito Corridor is expected to become the most competitive route for exporting these minerals, offering significant cost and time savings for exporters.”
Mohan Vivekanandan, group executive for coverage at the DBSA added: “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."
The DBSA said it remained committed to supporting infrastructure projects that drove economic growth and improved the quality of life for communities across Southern Africa.
“The funding will support the construction and upgrading of the railway infrastructure, including the procurement of 50% of the required wagons from a South African local manufacturing company, contributing to local content and economic benefits.”
