IN a groundbreaking development, Zambia’s President Hakainde Hichilema, along with Amos Hochstein, Senior Advisor to President Biden, and Samaila Zubairu, President and CEO of the Africa Finance Corporation (AFC), convened the Partnership for Global Infrastructure and Investment (PGI) Lobito Corridor Private Sector Investor Forum in Lusaka on February 8. It marked the first-ever PGI Investor Forum outside the United States and aims to accelerate private sector investment in the Lobito Corridor, facilitating connectivity between the DRC and Zambia with global markets through Angola.
The Lobito Corridor, inaugurated as the first strategic PGI economic corridor at the G7 Summit in Japan in May 2023 by President Biden under the G7 Partnership for Global Infrastructure and Investment initiative, is poised to integrate the African continent and strengthen connections with global markets. By expanding export opportunities, enhancing regional trade, and developing key market segments, the corridor seeks to create employment opportunities and improve livelihoods.
PGI’s initiatives to upgrade and construct new railways will result in the establishment of the first trans-African rail line, spanning from the Atlantic Ocean to the Indian Ocean. A potential $250 million investment from the US International Development Finance Corporation (DFC), currently undergoing due diligence, will support the Lobito Atlantic Railway (LAR) consortium in upgrading and operating the 1,300 km Benguela rail line across Angola, with advisory support from the AFC. The LAR upgrade is expected to significantly reduce transportation time, better connect mineral-rich regions in the DRC with global markets, and reduce the carbon emissions footprint of goods currently transported by road.
The Investor Forum followed the signing of a Memorandum of Understanding (MOU) in October 2023, wherein the African Development Bank, the AFC, the governments of Angola, DRC, Zambia, and the United States, along with the European Commission, affirmed their commitment to developing the Lobito Corridor. The MOU designates the AFC as the lead developer for the new Zambia-Lobito rail line extension from the Benguela line into northwest Zambia. In addition to railway development, PGI is investing catalytic public funds alongside G7 and African partners in various sectors, showcasing a novel model of private-sector led infrastructure development while upholding labour and environmental standards and promoting trade and investment in Africa.
The PGI Forum signifies the collaborative effort to further mobilise private sector investment across the Lobito Corridor and unlock its immense potential. During the forum, the US government and its partners announced additional commitments to the corridor:
- DFC approved a new $250 million debt facility to the AFC, pending congressional review, to support infrastructure development across the continent.
- U.S. Trade and Development Agency (USTDA) announced a feasibility study grant to REV-UP Solar Ventures Zambia for a 200-megawatt solar power plant and battery energy storage system in Solwezi, Zambia.
- LAR announced a six-year export shipment term-sheet with Canadian mining company Ivanhoe to advance its ambition of becoming the leading rail transport link in sub-Saharan Africa.
- AFC entered into an MOU with Congolese commodity trading and mining company La Générale des Carrières et des Mines (Gécamines) to develop critical minerals in the DRC.
- AFC signed an expression of interest with Kobaloni Energy to provide $100 million in financing for a cobalt refinery in Chingola, Zambia, aiming to establish the first electric vehicle battery grade cobalt sulphate plant on the African continent.
These announcements build on over $1bn of US government investments made in Angola in the past year, including loans supporting solar energy projects and bridge construction, as well as grants aiding mobile money services and women farmers’ programmes.
The Forum underscores the significance of the Lobito Corridor initiative as a vital logistics hub linking the region to international markets. It highlights the transformative potential of strategic public infrastructure investment in mobilising private investment across multiple sectors, fostering economic growth, and driving regional development.