The U.S. International Development Finance Corporation signed a $553 million loan with a consortium of firms on Wednesday for the refurbishment of an Angolan railway line – part of the Lobito critical minerals transport corridor.
The high-profile U.S.-backed Lobito Corridor, which will connect copper and cobalt mines to the Atlantic coast, is part of Washington’s global push to secure access to strategic metals and its efforts to counter Chinese influence in Africa.
Under the deal signed at a ceremony in Washington, the DFC will provide financing to the Lobito Atlantic Railway, a consortium of Portugal’s Mota Engil, commodities trading firm Trafigura and rail firm Vecturis SA.
The Development Bank of Southern Africa will contribute another $200 million under the deal, which was initially disclosed last year but has only now been finalised.
The agreement “underscores the United States’ commitment to advance strategic infrastructure that promotes regional trade, mutual economic growth, and long-term U.S.-Africa cooperation,” the DFC said in a statement.
WASHINGTON TAKES ON CHINA IN AFRICA
The funds will also support the rehabilitation and operation of an existing minerals port in Lobito, the development agency said, boosting transportation capacity ten fold to 4.6 million metric tons and cutting the cost of transporting critical minerals by up to 30%.
LAR, which in 2022 won the contract to run the Benguela rail line for three decades, has also said in the past it will use the loan to invest in more rolling stock and staff training.
The Lobito Corridor project is designed to counter the China-backed revival of the Tanzania-Zambia railway corridor and will link copper fields in Zambia and cobalt mines in the Democratic Republic of the Congo to Angola’s Lobito port on the Atlantic seaboard by railway.
The project involves the construction of 515 km (320 miles) of rail lines in Zambia and another 315 km (196 miles) in the Democratic Republic of Congo that will connect to the existing 1,300-km (808-mile) Benguela line in Angola.
Lagos-based Africa Finance Corporation, which is the lead developer of the corridor, has sought proposals from contractors for the construction of the Zambia leg of the new railway, after completing a feasibility study.
The developers plan to finalise more financing deals by the end of 2026, a senior AFC official told Reuters in September.
China Civil Engineering Construction Corporation (CCECC) said earlier this year it will invest $1.4 billion to rehabilitate the rival Tanzania-Zambia railway that uses Tanzanian ports to ship out minerals.
