Key takeaways:
- Africa Finance Corporation has reached financial close on a $753 million railway project in Angola
- The U.S. International Development Finance Corporation is providing $553 million
- The funding will rehabilitate a 1,300-kilometer rail line linking Angola’s Port of Lobito to the Democratic Republic of Congo border
Africa Finance Corporation (AFC) has reached financial close on a $753 million railway project that will rehabilitate a cross-border rail line linking Angola to the Democratic Republic of Congo.
The African infrastructure financier announced the deal on July 3 in Lagos. AFC acted as co-financial adviser on the transaction alongside Eaglestone, structuring and mobilizing funding for the project’s borrower and concessionaire, Lobito Atlantic Railway S.A.
The financing includes $553 million from the U.S. International Development Finance Corporation and $200 million from the Development Bank of Southern Africa. The money will fund the rehabilitation and upgrade of a 1,300-kilometer brownfield rail corridor connecting the Port of Lobito to the DRC border, and will also support the line’s long-term operation.
The deal follows financing agreements the parties signed late last year and is among the larger cross-border transport financings completed on the continent this year.
Samaila Zubairu, president and CEO of AFC, said the project would strengthen regional connectivity and support trade between Angola and neighboring markets. He described the corridor as “one of the continent’s more strategic transport routes” for unlocking economic activity in the region.
Mota-Engil and Trafigura will run the line
Lobito Atlantic Railway is a joint venture between construction firm Mota-Engil and commodities trader Trafigura. The company holds the concession to operate the corridor once rehabilitation work is complete.
Eaglestone Founding Partner Nuno Gil said reaching financial close reflected years of negotiation between the parties involved. He said the transaction showed that complex, multi-lender project financings could be structured and closed within Sub-Saharan Africa, and credited Mota-Engil and Trafigura for their role in bringing the deal together.
The rail line runs through Angola’s interior toward the mineral-rich border region shared with the DRC, an area that produces large volumes of copper and cobalt destined for export. Improving rail access to the Port of Lobito is expected to give mining companies operating in the region a shorter route to Atlantic shipping lanes, compared with existing routes through southern African ports.
DFC’s role reflects wider U.S. push in Africa
The $553 million commitment from the DFC is one of the agency’s larger infrastructure investments on the continent in recent years. The U.S. development finance institution has increasingly financed transport and mining-linked infrastructure in Africa as Washington competes with Beijing for influence over supply chains for critical minerals.
DBSA’s $200 million contribution adds to a growing list of regional development banks financing cross-border infrastructure in southern Africa. The bank has backed several transport and energy projects across the Southern African Development Community in recent years.
AFC, headquartered in Lagos, was established in 2007 and has financed infrastructure projects across more than 30 African countries, spanning power, transport, telecommunications and natural resources.
