DBSA approves $200 million for the Lobito corridor railway project

The Development Bank of Southern Africa (DBSA) has approved funding of up to $200 million for the Lobito corridor railway project in Angola, alongside the U.S. International Development Finance Corporation (DFC). This significant infrastructure project, valued at approximately $786.4 million, is designed to boost regional trade and transportation by creating a reliable railway link from Lobito Port on Angola’s Atlantic coast to the border with the Democratic Republic of Congo (DRC). The Bank’s function within the transport sector is to pursue infrastructure investment for projects tailored for the development of bridges, roads, bus stations, railways, terminals, airports, seaports, border ports, and more, according to an official release by DBSA.

The Lobito corridor railway project involves the finance, build, operate, and transfer (FBOT) of a 1,289 km brownfield main railway line from Lobito to Negrao and the Luau border, along with a 28 km branch line from Negrao to Bimbas. The project aims to enhance cargo transport, facilitating substantial flows of both international goods in transit and national goods in domestic circulation. The concession agreement for the project was signed in November 2022, with construction set to commence soon after achieving financial close.

Funding this project marks a significant advancement in enhancing the logistics framework of Southern Africa. By backing the Lobito corridor, the Bank is investing in essential infrastructure while also promoting economic opportunities and job creation in Angola and the DRC. This initiative supports sustainable development and strengthens regional cooperation.

This project is set to be transformative for the region, offering a crucial transport link for moving copper, cobalt, and other vital goods from the mineral-rich areas of the DRC to international markets through the Lobito Port.

"Our support for the Lobito corridor railway project aligns with our mission to drive sustainable economic growth and regional integration in Southern Africa, not forgetting building Africa’s prosperity,” states Mpho Mokwele, Group Executive for Transacting at DBSA.

The railway line is integral to a broader strategy supporting the energy transition by enabling the export of crucial minerals required for renewable energy technologies. The Lobito corridor is anticipated to emerge as the most competitive route for these exports, providing substantial cost and time savings for exporters, mentions the official release.

“The project will not only enhance the economic prospects of Angola and the DRC but also foster greater connectivity and trade across the Southern African Development Community (SADC),” adds Mohan Vivekanandan, Group Executive for Coverage.

The funding will support the construction and upgrading of the railway infrastructure, including the procurement of 50% of the required wagons from a South African local manufacturing company, contributing to local content and economic benefits, the release added.