IN a notable development, the US International Development Finance Corporation (DFC) announced in February its commitment to provide new financing support for the Lobito Corridor project—a transnational railway stretching over 1,300 kilometres and connecting Angola’s Port of Lobito with southern Democratic Republic of Congo (DRC) and north-western Zambia.
Collaborating with esteemed partners such as the European Commission, African Development Bank, and Africa Finance Corporation, the US and its allies have collectively mobilised nearly $1bn for this ambitious infrastructure project. This investment represents one of the largest single investments by the US and EU on the African continent in recent years.
The Lobito Corridor project has garnered significant international backing, owing to its strategic alignment with the global energy transition and its potential to bolster economic ties between Africa, the United States, and Europe. Its success serves as a blueprint for other large-scale infrastructure projects across Africa, attracting foreign investment and fostering international collaboration.
The forthcoming Invest in African Energy (IAE) forum, scheduled to take place in Paris, aims to explore this model further, facilitating connections between Africa’s project pipeline and global investor interest. Infrastructure projects like the Lobito Corridor have the potential to catalyse local job creation and the development of value-added industries, making them crucial drivers of economic growth in Africa.
Organised by Energy Capital & Power, IAE 2024 is an exclusive platform designed to facilitate investment partnerships between African energy markets and global investors. Set to occur on May 14-15, 2024, in Paris, the event promises delegates two days of immersive engagement with industry experts, project developers, investors, and policymakers.
The Lobito Corridor stands out for its inherent demand from global markets, a factor that distinguishes it from many other African infrastructure projects. Securing financial closure for such projects often proves challenging due to a lack of secure offtake agreements and feasibility studies. However, the Lobito Corridor has received support from both the US and EU, with memorandums of understanding (MOUs) signed to source critical minerals for their respective electric vehicle (EV) battery supply chains. Additionally, both entities have committed to supporting pre-feasibility studies for extending the corridor from eastern Angola to Zambia. Notably, multinational commodity trader Trafigura and Canada’s Ivanhoe Mines have inked agreements to export their copper production to the DRC via the Lobito rail route, further solidifying its commercial viability.
Furthermore, the Lobito Corridor project exemplifies the effectiveness of public-private partnerships (PPPs) in infrastructure development. By mobilising financing and distributing risks among multiple stakeholders, PPPs not only garner government support but also leverage private-sector expertise essential for technical project development. A consortium comprising Trafigura, Portugal’s Mota-Engil, and Belgium’s Vecturis SA has been entrusted with managing railway services and logistical support for the project.
The commitment and cooperation of the governments of Angola, DRC, and Zambia in facilitating cross-border agreements and regulatory frameworks underscore the project’s feasibility and potential. Establishing robust legal protections for investors minimizes risks and propels projects like the Lobito Corridor forward, paving the way for transformative infrastructure development in Africa.
For more details or to participate as a sponsor or delegate, interested parties can reach out to [email protected] or visit www.Invest-Africa-Energy.com.
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