BAD Raises Funds for Corridor from Lobito.
The African Development Bank (AfDB) has joined forces with global partners in a significant fundraising venture for the Lobito Multinational Transport Corridor, an ambitious program with a budget of US$1,6 billion. The agreement, formalized through a Memorandum of Understanding (MoU), aims to harness the full economic potential of this transport corridor.
The initiative has the support of multiple actors, including the government of the United States of America (USA), the European Commission (EC) and others. The collaboration spans diverse sectors, paving the way for a shared vision of an open access rail link from the Atlantic Ocean to the Indian Ocean.
ADB's MOU
ADB signed the MOU joining global partners to mobilize resources for the Lobito Corridor and the Zambia-Lobito railway line in southern and central Africa. Other signatories include the US government, the European Comission, the African Finance Corporation (AFC), and the host governments of Zambia, Angola and the Democratic Republic of Congo (DRC).
The MOU, signed on 27 October, outlines the partners' intentions to collaborate across multiple sectors to realize the corridor's full economic potential, based on the Lobito Corridor Transit Transport Facilitation Agency agreement signed by the three African governments in January this year.
The jobs
Work includes the construction of approximately 550 km of railway line in Zambia, from the Jimbe border to Chingola in the Zambian copper zone, and 260 km of main access roads within the corridor.
When completed, the program will expand an economic corridor connecting host countries to global markets to promote regional trade and growth and to advance the shared vision of a continuous open access railway from the Atlantic Ocean to the Indian Ocean.
The signing took place on the sidelines of the Global Gateway Forum 2023 in Brussels, Belgium, just weeks before this year's African Investment Forum Market Days, which offer a $1,6 billion investment opportunity for financing across sectors public and private, including Public-Private Partnerships.
ADB’s Contribution
The ADB plans to contribute around $500 million to the project through a combination of sovereign and non-sovereign instruments, including concessional allocations. During the African Investment Forum Market Days, an in-depth discussion will be held on the Lobito Corridor.
Solomon Quaynor, Vice President for Private Sector, Infrastructure and Industrialization, signed on behalf of ADB.
“The Lobito Corridor Project is a strategic corridor that will facilitate regional integration and boost trade in three countries and beyond.”
“It will attract investments in digital access, clean energy supply chains and agricultural value chains, which will increase competitiveness and regional trade under the African Continental Free Trade Area (AFTA).”
“The ADB is ready and pleased to work with the three countries and other partners (PGII, EU, AFC) to accelerate its implementation,” said Quaynor.
Amos Hochstein, Deputy to President Joe Biden for Energy and Investment, signed on behalf of the US, highlighting the expected results.
“Demonstrating the Global Infrastructure and Investment Partnership in action and leveraging Western and African capital, this strategic transportation infrastructure unlocks regional trade.”
“It enables additional investments in digital connections, agricultural value chains, clean energy supply chains and electrification of rural health centers, among other transformative economic imperatives,” he said.
Other representatives included Jutta Urpilainen, European Union Commissioner for International Partnerships; José de Lima Massano, Minister of State for Economic Coordination of Angola; Jean-Michel Lukonde, Prime Minister of the Democratic Republic of Congo; and Situmbeko Musokotwane, Minister of Finance and National Planning of Zambia.
With the support of partners, AFC will act as the overall Project Developer, facilitating the preparation phase of the Zambia-Lobito Rail Line Project and can continue for subsequent phases.
The Launch of the Corridor
In January 2023, the three countries came together to launch the Lobito Corridor Transit Transport Facilitation Agency, based in Lobito, to accelerate the growth of domestic and cross-border trade along the Lobito Corridor.
By implementing harmonized trade facilitation instruments, strengthening the coordination of joint corridor development activities and promoting the effective participation of small and medium enterprises (SMEs) in value chains.
The program will create thousands of jobs and industrial opportunities for the private sector across the Lobito Corridor, linking Angola and the DRC.
THE BAD
The African Development Bank Group is Africa's leading development financing institution. Composed of three distinct entities – the African Development Bank (AFDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF).
On the ground in 41 African countries, with an external office in Japan, the Bank contributes to the economic development and social progress of its 54 regional Member States.
Conclusion
The signing of this agreement is a significant step towards the development of the Lobito Multinational Transport Corridor and the Zambia-Lobito railway line. ADB, together with its partners, is committed to boosting economic growth, regional trade and integration through this project.
With a combination of sovereign and non-sovereign financial instruments, the ADB expects to contribute approximately $500 million to this effort. This project has the potential to create significant opportunities in the region, generating jobs and establishing a solid foundation for sustainable economic development.
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Picture: © 2023 AfDB
