USA, Zambia, AFC organize PGI Forum to strengthen investment in Lobito Corridor

USA, Zambia, AFC organize PGI Forum to strengthen investment in Lobito Corridor

His Excellency Hakainde Hichilema, President of the Republic of Zambia, Amos Hochstein, Senior Advisor to President Biden and Samaila Zubairu, President and CEO of the Africa Finance Corporation (AFC) convened the Private Corridor of the Partnership for Global Infrastructure and Investment (PGI) Lobito Sector Investor Forum in Lusaka today. This is the first PGI Investor Forum outside the United States, bringing together over 250 business and government leaders from Angola, the Democratic Republic of Congo (DRC), the European Union, the United States and Zambia, as well as international investors and industry. the leaders. The forum will accelerate private sector investment in the Lobito Corridor, which will connect the DRC and Zambia to global markets through Angola.

The Lobito Corridor is the first PGI strategic economic corridor launched by President Biden at the G7 Summit in Japan in May 2023 under the flagship initiative of the G7 Global Infrastructure and Investment Partnership. The corridor will integrate the African continent and improve links to global markets by expanding export opportunities, boosting regional trade and growing key market segments, all while creating good jobs and improving lives.

PGI’s efforts to upgrade and build new railways will result in the first trans-African railway line, stretching from the Atlantic Ocean to the Indian Ocean. A US$250 million investment by the US International Development Finance Corporation (DFC), currently under due diligence, would support the Lobito Atlantic Railway (LAR) consortium that is upgrading and operating the 1,300 km Benguela railway line across Angola with advisory support from the Africa Finance Corporation (AFC). The LAR upgrade will dramatically reduce transport times, better connect critical mineral-rich regions in the DRC to global markets, and lower the carbon footprint of goods currently moving by road. By lowering costs for businesses along the corridor, it will also open up new markets, including agribusiness.

The Investor Forum follows the signing of a Memorandum of Understanding (MOU) in October 2023, in which the African Development Bank, AFC, the governments of Angola, DRC, Zambia and the United States and the European Commission underlined their joint commitment to the development of the Lobito Corridor . The MOU named AFC as the lead developer on the new Zambia-Lobito railway line that runs from the Benguela line in northwestern Zambia. In addition to railways, PGI is investing catalytic public funds together with the G7 and African partners in various sectors, demonstrating a new model of holistic infrastructure development led by the private sector while maintaining strong labor and environmental standards, and promoting trade and investment in the African continent.

The PGI Forum marks the coming together of partners to further mobilize private sector investment along the Lobito Corridor and unlock the great potential of this region. During the forum in Lusaka, the US government and partners announced additional commitments to the corridor:

  • DFC announced that its Board of Directors approved a new $250 million debt facility for AFC that will support their efforts to develop high-quality, high-standard infrastructure across the continent. This potential project is now awaiting congressional review. DFC also marked its commitment to provide a $10 million loan to Seba Foods Zambia, the first US food and agriculture investment along the Lobito Corridor.
  • Additionally, the United States Trade and Development Agency (USTDA) announced a feasibility study grant to REV-UP Solar Ventures Zambia to develop an estimated 200 megawatt solar power plant and battery energy storage system in Solwezi , Zambia. The project will supply clean and sustainable electricity to Zambian industry and households and has the potential to power two critical mineral mines in the Democratic Republic of Congo.
  • This week LAR announced a six-year export delivery term sheet with Canadian mining company Ivanhoe that will advance the rail line’s ambitions to become the main rail transport link in sub-Saharan Africa and support the chain’s diversification of clean energy supply.
  • Supporting efforts to unlock the potential of the copper belt 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.
  • 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 sulfate plant on the African continent.

These announcements build on more than $1 billion in US government investments made in Angola last year. This includes an authorization by the Export-Import Bank of the United States (EXIM) for a loan of more than $900 million to support the construction of two solar power plants that will generate over 500 megawatts of renewable energy and a guarantee additional $363 million EXIM to support. financing and building over 180 bridges connecting Angola’s rural communities. Further, two USAID grants are enabling Africell’s recent mobile money launch to reach more underserved populations and expand an existing program supporting women farmers in communities around the Lobito Atlantic rail line.

Today’s point underlines the importance of the Lobito Corridor initiative. The corridor is a vital logistics hub connecting the region to international markets, demonstrating that strategic investment in public infrastructure can mobilize private investment in many sectors to drive economic growth that transforms the region.

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