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DFC announces new financing for Lobito Corridor

9th February 2024

By: Sabrina Jardim

Creamer Media Online Writer

     

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US International Development Finance Corporation (DFC) deputy CEO Nisha Biswal has announced new financing in support of the Lobito Corridor, which extends across Angola, Zambia and the Democratic Republic of Congo (DRC), at this year’s Partnership for Global Infrastructure and Investment’s (PGII's) Lobito Corridor Investor Forum, in Lusaka, Zambia.

“Africa is DFC’s largest regional portfolio with over $11-billion in financing for projects across the continent, including along the Lobito Corridor. We are committed to working with our partners on the continent to build high-quality infrastructure and invest in agriculture, healthcare and financial services that will impact lives and livelihoods across the corridor,” Biswal commented in a February 8 statement.

At the forum, Biswal celebrated DFC’s longstanding partnership with the Africa Finance Corporation (AFC), which is spearheading Phase II of the Lobito Corridor.

She shared that DFC’s board of directors had approved a $250-million loan to AFC that would support its efforts to develop high-quality infrastructure across Africa. That potential project is now pending Congressional review.

The DFC has a long history with AFC and is working with the institution to determine how to support its work across the African continent in developing high-quality infrastructure that is critical to economic growth and development.

Biswal also marked DFC’s commitment to provide a $10-million loan to Seba Foods Zambia, alongside Seba Foods CEO Gaurav Vijayvargiya. This is the first US food and agriculture investment along the Lobito Corridor.

The DFC loan will support the expansion of Seba Foods Zambia’s food production and storage capacity for maize-based, soya-based and other nutritious and affordable consumer food products, thereby strengthening the food value chain in Zambia.

These new DFC investments align with the Group of Seven's (G7's) PGII, which DFC committed $8.1-billion to in 2023.

The DFC advances the PGII by promoting high standards for infrastructure financing and investment for Africa’s development goals, including in transportation and digital infrastructure, agricultural development, health infrastructure, expanded access to electricity, and the diversification of supply chains, including for critical minerals.

PGII FORUM

Meanwhile, Zambia President Hakainde Hichilema, senior adviser to US President Joe Biden, Amos Hochstein, and president and CEO of the AFC Samaila Zubairu, convened at the PGII Lobito Corridor Private Sector Investor Forum in Lusaka this week.

This is the first PGII Investor Forum outside the US, bringing together over 250 business and government leaders from Angola, the DRC, the European Union, the US and Zambia, as well as international investors and industry leaders.

The forum will accelerate private sector investment in the Lobito Corridor, which will connect the DRC and Zambia with global markets through Angola.

The Investor Forum follows the signing of a memorandum of understanding (MoU) in October 2023 in which the African Development Bank, the AFC, the governments of Angola, the DRC, Zambia and the US, and the European Commission, underscored their shared commitment to developing the Lobito Corridor. 

The MoU named the AFC as lead developer on the new Zambia-Lobito rail line extending from the Benguela line into northwest Zambia.  

In addition to rail, PGII is investing catalytic public funds alongside G7 and African partners in various sectors, demonstrating a new model of holistic private-sector-led infrastructure development while maintaining strong labour and environmental standards, and promoting trade and investment on the African continent.

The PGII Forum marks the partners coming together to further mobilise private sector investment across the Lobito Corridor and unlock the enormous potential of this region. 

Additionally, the US Trade and Development Agency announced a feasibility study grant to REV-UP Solar Ventures Zambia to develop an estimated 200 MW solar power plant and battery energy storage system in Solwezi, Zambia.  

The project will supply clean, stable electricity to Zambian industry and households and has the potential to provide power for two critical mineral mines in the DRC.

Moreover, the Lobito Atlantic Railway (LAR) consortium announced this week a six-year export shipment term sheet with Canadian mining company Ivanhoe Mines that will advance the rail line’s ambitions to become the leading rail transport link in sub-Saharan Africa and support clean energy supply chain diversification.

Supporting efforts to unlock the potential of the Copperbelt region, AFC has entered into an MoU with Congolese commodity trading and mining company La Générale des Carrières et des Mines – Gécamines – to undertake the development of critical minerals in the DRC.

The AFC has also signed an expression of interest with Kobaloni Energy to provide $100-million in financing for a cobalt refinery in Chingola, Zambia, with the objective of building the first electric vehicle battery grade cobalt sulphate plant on the African continent.

These announcements build on the more than $1-billion of US government investments made in Angola in the past year.

This includes an Export-Import Bank of the United States (Exim) authorisation of a more than $900-million loan supporting construction of two solar energy power plants that will generate over 500 MW of renewable energy, and an additional $363-million Exim loan guarantee to support financing and construction of over 180 bridges connecting rural Angolan communities.

Further, two USAID grants are enabling Africell’s recent mobile money launch to reach more underserved populations, and to expand an existing programme supporting women farmers to communities around the Lobito Atlantic rail line.

The corridor is a vital logistics hub that connects the region to international markets while demonstrating that strategic public infrastructure investment can mobilise private investment across multiple sectors to promote economic growth that transforms the region.

The corridor will integrate the African continent and enhance connections with global markets by expanding export possibilities, boosting regional trade, growing key market segments and creating decent job opportunities.

The PGII’s efforts to upgrade and build the new railway will result in the first trans-African rail line, stretching from the Atlantic Ocean to the Indian Ocean.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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