A general view of processing facilities in Tenke Fungurume Mine, one of the largest copper and cobalt mines in the world, in Southeastern Democratic Republic of Congo, on June 17, 2023. PHOTO | AFP
The United States has made new financing commitments totalling $360 million towards the construction of the Lobito corridor connecting the Democratic Republic of Congo (DRC) and Zambia through Angola to global markets in a relentless push to counter the growing influence of China on the African continent.
DRC, Tanzania and Zambia are emerging as theatres of power competition in the continent owing to their rich but unexplored reserves of critical mineral resources such as cobalt, copper and lithium.
And a new infrastructure development plan conceived by a consortium of investors led by the US called Partnership for Global Infrastructure and Investment (PGI) initiative— the Lobito Corridor — is rapidly emerging as a counter to China’s Belt and Road Initiative (BRI) in these countries, according to an Indian-based independent global think tank Observer Research Foundation (ORF).
Last week, Zambian President Hakainde Hichilema, US President Joe Biden’s Senior Advisor Amos Hochstein and the Africa Finance Corporation (AFC) President Samaila Zubairu convened the PGI Private Sector Investor Forum in Lusaka, the first PGI Investor forum outside the US to mobilise resources for accelerating private sector investment in the Lobito Corridor.
The forum brought together over 250 business and government leaders from Angola, DRC the European Union, the US, Zambia, international investors and industry leaders.
During the event the American Development Finance Corporation (DFC) announced its board has approved a new $250 million debt facility to the Africa Finance Corporation (AFC) to support the development of infrastructure projects across the African continent.
The proposed financing is undergoing a due diligence.
DFC also marked its commitment to provide a $10 million loan to Seba Foods Zambia, the first American food and agriculture investment along the Lobito Corridor.
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. This brings to about $360 million new financing commitments made by American institutions in Lusaka towards Lobito.
Other deals included a memorandum of understanding 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.
In addition, the US 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, stable electricity to Zambian industry and households and has the potential to provide power for two critical mineral mines in the DRC.
“Today’s milestone underlines the importance of the Lobito Corridor initiative,” says a statement from AFC “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 latest announcements build on the more than $1 billion of US government investments made in Angola in the last 12 months, including an Export-Import (Exim) Bank of the US authorisation of a more than $900 million loan supporting construction of two solar energy power plants that will generate over 500 megawatts of renewable energy, and an additional $363 million Exim loan guarantee to support financing and construction of over 180 bridges connecting rural Angolan communities.
DRC, Zambia and Angola joined together in January 2023 to launch the Lobito Corridor Transit Transport Facilitation Agency Agreement to accelerate growth in domestic and cross-border trade along the Corridor.
Located in Central Africa, the Corridor proposes to build a railway line connecting the critical mineral mines in Zambia, and DRC with Lobito port in Angola.
The 1,200 km railway line traversing Angola from the Atlantic Ocean to the country’s borders with the DRC and Zambia, has seen a resurgence in interest, with the signing of several MOUs and agreements most of which concern the development of the Corridor and activities related to green and clean energy technologies, in particular EV battery value chain products.
The rail is expected to dramatically reduce transport time, better connect critical mineral-rich regions in the DRC with the global markets and lower the carbon emissions footprint of goods currently moved by road.
The lowering of the cost for businesses along the corridor will also open new markets, including agribusiness.
The corridor will integrate the African continent and enhance connections with global markets by expanding export possibilities, boosting regional trade, and growing key market segments, all while creating decent jobs and improving lives.
The PGI’s efforts to upgrade and build new railway will result in the first trans-African rail line, stretching from the Atlantic Ocean to the Indian Ocean.
However, according to Africa Policy Research Institute (APRI) China has deepened its presence on the African continent and is already far ahead in building supply chains for cobalt, lithium, and several other essential metals and minerals.
“And what is more, China is moving to take over the running of the Tazara railway line, which runs from central Zambia to the port of Dar es Salaam on the Indian Ocean, as a way of ensuring effective transportation of materials and minerals from the DRC and Zambia,” the institute says.
“It is also not insignificant that China signed MoUs with most African countries a decade ago.”
