Project highlight: the Lobito Railway Corridor

Angola

The Lobito Railway Corridor is a developing logistics link designed to transport minerals – particularly the copper and cobalt needed to manufacture electric vehicles – from inland Africa to Angola’s Atlantic port of Lobito.

The project involves upgrading and expanding the existing rail line to create a link from the copper belts in Zambia and the Democratic Republic of the Congo to a congestion-free port in Lobito. At present, minerals exports from the region chiefly run through East African ports,which means lengthy transport routes ending in frequently bottlenecked ports.

KEY PLAYERS: The Lobito Atlantic Railway consortium, comprising commodities playerTrafigura, Mota-Engil Engenharia e Construcao Africa and independent rail operator Vecturis, was awarded a 30-year concession in 2022 to develop the rail corridor to the DR Congo border. In October 2023, an MoU was signed to support the corridor’s development, with signatories including the governments of Angola, DR Congo, Zambia and the USA, as well as the EU, the African Finance Corporation and the African Development Bank. Africa Finance Corporation will serve as overall project developer.

INVESTMENT: The overall investment is expected to top USD 1.6 billion. The African Development Bank has committed to contribute around USD 500 million while helping to raise USD 1.6 billion in financing. Meanwhile, the three joint-venture partners will invest USD 455 million, along with securing more than 1,500 wagons and 35 locomotives for the Angolan section. The partners will also invest as much as USD 100 million in the Congolese section.

PROJECT SCOPE: The project will upgrade the current Lobito railway, which runs for around 1,300 kilometres across Angola, with an extension of around 400 kilometres into DR Congo. Around 550 kilometres of rail line will be constructed in Zambia, running from the Jimbe border crossing to the city of Chingola in the Zambian copper belt. Additionally, around 260 kilometres of feeder roads will be built. In a related development, AGL (formerly Bolloré Africa Logistics) was in December 2023 awarded the concession of the Lobito port’s multipurpose terminal and expects to invest EUR 100 million in its upgrade.

TIMELINE: July 2023 marked the beginning or a process to transfer of the concession of railway services and support logistics of the Lobito Corridor to the Lobito Atlantic Railway. A six-month feasibility study is projected to run for the first half of 2024. A target of late 2028 has been set for completion, according to a US government official, who stressed her administration’s goal of having the project move as quickly as possible.

SIGNIFICANCE: The project will expand the minerals export capacity of DR Congo and Zambia, while enhancing Angola’s position as a regional and global logistics hub for trade in general, and the trade of energy transition minerals in particular. As the project serves as a counterpart to China’s Belt and Road global infrastructure investment programme, it has won support from the USA and EU. The US government aims to play a stronger role in African infrastructure development given China’s domination in this realm over the past two decades.

LOCAL BENEFITS: The Lobito Railway Corridor is poised to support the development of diverse economic sectors along its route, bringing news jobs and economic opportunities, as well as boosting cross-border trade. The joint venture has also committed to training and hiring locals, with two dedicated training centres already set up. Further, the upgraded railway will also contribute to greater safety and a reduction of carbon emissions by removing trucks from roads. Fewer trucks will also mean a decrease in border delays and road degradation.

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