African Finance Corporation backs Lobito Corridor

The African Finance Corporation (AFC) has made a significant commitment of $500 million to the Zambia-Lobito Corridor project, a multi-country initiative supported by U.S. President Joe Biden during his recent visit to Angola. CNBC Africa's Godfrey Mutizwa had an exclusive conversation with AFC President Samaila Zubairu in Rabat, Morocco, following his meeting with the U.S. President's delegation. The discussion shed light on the transformative impact of the project on Africa's infrastructure and economic development. Zubairu emphasized the critical role Africa plays in the global energy transition, highlighting the continent's vast mineral and renewable energy resources. Africa's abundant minerals and metals, coupled with its renewable energy sources, provide a compelling investment opportunity for achieving a low-carbon path to net zero emissions. The Zambia-Lobito Corridor project aims to unlock the value chains of battery minerals, agriculture, and ecotourism while facilitating better access to sustainable energy sources like hydroelectricity and solar and wind power along the South African development corridor. Beyond addressing infrastructure needs, the project seeks to tackle key challenges such as poverty, unemployment, inequality, and climate resilience across the region. One of the primary objectives of the Zambia-Lobito Corridor is to establish a trans-African rail network connecting the Atlantic and Indian Oceans. This connectivity will significantly reduce transportation times for minerals and metals, cutting down journeys from up to 45 days to just seven to ten days. Additionally, the project promises a lower cost and lower emissions route for transportation, aligning with global sustainability goals. The initiative also entails fast-tracking demining efforts in areas with significant agricultural potential, fostering agricultural development and carbon sequestration opportunities. The partnership driving the Zambia-Lobito Corridor project involves a consortium of key stakeholders, including the U.S. Office for Program for Infrastructure and Investment, the European Commission, and the governments of Angola, Zambia, and the Democratic Republic of Congo (DRC). Tanzania's recent confirmation to join the collaboration underscores the project's potential to enhance regional connectivity and economic integration. The involvement of multilateral development finance institutions further strengthens the project's foundation, with Italy recently expressing interest in joining the consortium and offering substantial financial support. In a strategic move towards value addition, the AFC announced a battery manufacturing deal in Zambia, aiming to produce battery precursors from locally sourced minerals like copper and cobalt. By processing these minerals with lower carbon intensity, the project seeks to support the transition to electric vehicles and battery technologies. Moreover, the initiative aligns with the vision of building regional value chains and fostering economic diversification across the continent. Zubairu's participation at the Africa Investment Forum highlighted the AFC's ongoing infrastructure projects, including the Lobito Corridor and the Metro King metro line in the DRC. By engaging with investors and presenting these transformative projects, the AFC aims to catalyze further investment in critical infrastructure within the region. The organization's focus on leveraging Africa's resources, mobilizing local funds, and promoting sustainable development reflects a commitment to driving long-term socio-economic progress on the continent.