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US Commits $360 Million For Lobito Corridor Construction

US Commits $360 Million For Lobito Corridor Construction

The United States has made new financing commitments totaling $360 million towards the construction of the Lobito corridor.

The corridor connects 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.

The funding will come from the American Development Finance Corporation (DFC) as a facility for the Africa Finance Corporation (AFC) to aid in the development of infrastructure projects throughout Africa.

The Composition of $360 Million Loan

Part of $360 million includes a provision of a $10 million loan to Seba Foods Zambia, marking the first American food and agriculture investment along the Lobito Corridor.

AFC will commit $100 million in financing in a plan with Kobaloni Energy for a cobalt refinery in Chingola, Zambia.

Also Read: Zambia to Start Trading Own Copper at a Limited $100 Million in Six Months

This is for the establishment of the first electric vehicle battery-grade cobalt sulphate plant on the African continent.

These initiatives represent a total of about $360 million in new financing commitments from American institutions in Lusaka towards the Lobito Corridor.

Other deals included a memorandum of understanding with Congolese commodity trading and mining company La Générale des Carrières et des Mines (Gécamines) to develop critical minerals in the DRC.

The US Trade and Development Agency (USTDA) also announced a feasibility study grant to REV-UP Solar Ventures Zambia for the development of an estimated 200-megawatt solar power plant and battery energy storage system in Solwezi, Zambia.

The project will provide clean and stable electricity to Zambian industries and households, with the potential to power two critical mineral mines in the DRC.

Earlier US Funding in Angola

AFC said the Lobito Corridor serves as a crucial logistics hub connecting the region to international markets.

The recent announcements build upon over $1 billion of US government investments made in Angola over the past year.

This includes an Export-Import Bank of the United States (EXIM) authorization of a more than $900 million loan supporting construction of two solar energy power plants.

The plants will generate over 500 megawatts of renewable energy.

It also includes an additional $363 million EXIM loan guarantee to support financing and construction of over 180 bridges connecting rural Angolan communities.

Zambia, Angola Collaboration

In January 2023, DRC, Zambia, and Angola collaborated to launch the Lobito Corridor Transit Transport Facilitation Agency Agreement for domestic and cross-border trade along the corridor.

The corridor in Central Africa plans to construct a railway line connecting mineral-rich regions in Zambia and the DRC to the Lobito port in Angola.

It is expected to reduce transport time, improve connectivity, lower carbon emissions, and open up new markets, including in agribusiness.

Upgrading and building new railways are set to establish the first trans-African rail line from the Atlantic Ocean to the Indian Ocean.