Lobito Trans-Africa Corridor: U.S. Infra investment in Africa

Lobito Trans-Africa Corridor Expansion and U.S. Infrastructure on the African Continent

FACT SHEET

December 03, 2024

TEXT

Today, the United States and Angola are co-hosting a Partnership for Global Infrastructure and Investment (PGI) Lobito Trans-Africa Corridor Summit, bringing together leaders from the Democratic Republic of the Congo (DRC), Tanzania, and Zambia, as well as the Africa Finance Corporation (AFC).  The leaders will affirm their commitment to continue developing the Corridor and invest in infrastructure to connect the Atlantic and Indian Oceans.  They will further pledge to accelerate the next phase of the Corridor with the new Zambia-Lobito rail project.  The Summit will underscore the importance of enabling sustainable private sector investments that unlock inclusive economic growth and sustainable development for local and regional communities.
 
Through PGI—a bipartisan initiative in partnership with G7+, for strategic, values-driven, and high-standard infrastructure and investment in low- and middle-income countries—the United States and our partners aim to positively impact people’s lives, strengthen and diversify our supply chains, protect workers, and advance shared national security interests.  The flagship Lobito Trans-Africa Corridor, anchored in core rail investments, is a transformative economic corridor that connects the region and accelerates trade and the growth of key sectors supporting the economic diversification and development priorities of African leaders.  The United States is working with partners around the world to replicate the success of the Lobito Trans-Africa Corridor and help bridge the global infrastructure gap.
 
In September 2024, U.S. Secretary of State Antony Blinken announced the completion of an initial feasibility study and launch of the environmental and social impact assessment for the Zambia-Lobito rail project, a greenfield 800-kilometer rail line being built from scratch linking Angola and Zambia for the first time.  Together, these studies ensure the project is economically and financially viable and will be delivered following international best practices on labor, community participation, and environmental protection.  AFC, Angola, and Zambia also celebrated the signing of the concession agreement, which allows the next phase of development to continue.  The target date to break ground is early 2026.
 
Today, President Biden is announcing over $560 million in new funding, including commitments expected to generate at least $200 million in additional private sector capital, for infrastructure projects along the Corridor, bringing the total for U.S. investments to more than $4 billion. With these announcements and together with G7 partners and regional development banks, international investment in the Lobito Corridor has exceeded $6 billion. These investments will be mobilized towards new and continuing projects that support the economic potential and development impacts of the Corridor across multiple interconnected sectors, including transportation and logistics, agriculture, clean energy and associated supply chains, health, and digital access.
 
Transportation and Logistics
 
Rail and other transportation and logistics-related infrastructure forms the backbone of the Corridor and will enable expanded trade and business growth.  While these investments are traditionally public-sector investments, the United States through PGI is supporting commercially driven projects that lock-in efficiency and sustainable maintenance over the long-term.
 

• Following the due diligence announced by President Biden in May 2023, the U.S. International Development Finance Corporation (DFC) is announcing the commitment of a $553 million direct loan to the Lobito Atlantic Railway to upgrade and operate a 1,300-kilometer rail line from the Lobito port to the Angolan town of Luau on the DRC border.  This investment supports the anchor rail investment of the first phase of the Lobito Trans-Africa Corridor and is the backbone on which additional high-quality investments in agriculture, healthcare, energy, and financial services will be built.  The Lobito Atlantic Railway’s operational improvements have already scaled up the number of freight shipments from once per month to two times per week.
• The U.S. Agency for International Development (USAID) and the Angolan Ministry of Transportation are signing a MOU to support new personnel and IT equipment, with the aim of helping the Ministry leverage private investment in Angola’s infrastructure and development.  This followed the approximately $1 million grant announced earlier in 2024 by the USAID to assist the Ministry.
• The anchor rail line of the second phase of the Lobito Trans-Africa Corridor, the new Zambia-Lobito rail project, was launched in October 2023, with the AFC as the lead project developer.  Building on AFC’s initial $5 million for feasibility studies and project development, AFC is announcing its commitment to anchor and mobilize up to $500 million through various financial instruments to ensure the project reaches financial close, in line with its prior track record.  The announcement complements a technical assistance grant the U.S. Trade and Development Agency (USTDA) awarded to AFC in September 2024 for an environmental and social impact assessment to facilitate this effort and to move the project towards financial close.
• In October 2024, KoBold Metals, a U.S. company applying artificial intelligence to develop a critical minerals site in Zambia, signed Memorandum of Understanding (MOU) with AFC committing to anchor the commercial viability of the Zambia-Lobito rail project with more than 300,000 tons of copper per year from its Mingomba mine.  AFC will collaborate with KoBold to support the Mingomba project, through a combination of project development funding, equity, or debt financing as required.
• AFC signed MOUs this month totaling an additional 170,000 tons of minimum freight commitments from Zambian mining projects including from Kobaloni Energy, which is planning to construct the first cobalt sulphate refinery on the African continent, and First Quantum Minerals, one of the world’s top ten copper producers.  These commitments will help the new Zambia-Lobito rail project raise capital at a lower cost.  The MOUs also represent start of creating a diversified supply chain route for the critical minerals that support the global energy transition.
• Since 1995, the United States has provided over $164 million for humanitarian demining in Angola.  This lifesaving assistance plays a critical role in bolstering human security, providing safe access to land for economic development, and facilitating environmental conservation in the Okavango River Basin. The U.S. Department of State announced a total of $9 million in de-mining assistance over the next two years that will facilitate rail construction along the Lobito Trans-Africa Corridor, as well as other economic development goals across Angola, as part of a multi-year campaign for Angola to achieve mine-free status.  With a $10 million match from the Government of Angola, implementing partners will be able to clear the mines left from Angola’s decades-long civil war, enabling the land to be recultivated for farming and other uses.
• In December 2023, the Millennium Challenge Corporation (MCC) Board of Directors selected Tanzania to develop a threshold program.  MCC and the Government of Tanzania are now developing a trade and investment program to facilitate trade between Tanzania and its neighbors and address trade barriers.  The program is scheduled to launch in late 2025 and builds on MCC’s more than $700 million in prior investments in governance, transportation, energy, and water in Tanzania.

 
Agriculture

In support of U.S. efforts to accelerate agricultural-led economic growth in Angola and our partners across the Lobito Trans-Africa Corridor, the United States is investing in value-added food processing and connecting farmers to global markets.  These investments also deliver on President Biden’s commitment under the U.S.-Africa Partnership to Promote Food Security and Resilient Food Systems, to step up our investments to build more resilient food systems in Africa and to unlock Africa’s enormous agriculture production potential.
 

• Today, President Biden will meet with businesses that are investing in the Lobito Trans-Africa Corridor enabled by U.S. support.  He will visit the Lobito production facilities of the Carrinho Group, Angola’s largest food producer, which is rapidly expanding the network of family farmers from whom it sources raw produce for products sold across the country.  President Biden will celebrate the first shipment of Carrinho food products along the Lobito Atlantic Railway line to be sold in the DRC, supporting regional food security.  To enhance agriculture expansion, USAID has partnered with Carrinho through an existing $5.5 million program and public-private partnership focused on women’s empowerment, to facilitate the offtake of grain and crops grown by communities along the Corridor.  In November 2024, DFC signed a non-binding Letter of Interest to explore a loan that would support Carrinho to purchase and install grain storage equipment to reach more farmers along the rail Corridor and key hubs.  Complementing these investments is the previously announced Export-Import Bank of the United States (EXIM) financing to build 186 rural bridges.  This financing will further support thousands of smallholder farmers to participate in this sustainable agriculture value-chain as Carrinho grows its farmer network to two million farmers by 2030.
• The African Development Bank is announcing its intention to finance $370 million across three agriculture projects facilitating regional trade and food security and promoting sustainable commercial agriculture value chains.  These projects are expected to mobilize an additional $100 million in private sector capital and will enhance food security, promote the economic inclusion of local communities, including small- and medium-sized enterprises, and create jobs in agriculture and other sectors along the Lobito Trans-Africa Corridor.  To accelerate implementation, the U.S. Department of the Treasury will make a $3 million commitment to the Bank to support project preparation and feasibility work.  This complements the Bank’s November 2023 $500 million commitment to invest in the Zambia-Lobito rail project, and adds to the $289 million agricultural value chain and transport infrastructure project in the DRC it financed in July 2024.  This brings the Bank’s total investment in the Corridor to more than $1 billion over the past 12 months.
• In October 2024, a U.S. consortium led by Amer-Con Corporation signed an MOU with ARCCLA, the Angolan public entity within the Ministry of Transportation responsible for the Lobito Trans-Africa Corridor, to build and operate silo terminals and collection points on planned logistics platforms along the Corridor and nationwide.  The project will focus on staple crops such as corn, rice, soybean, and wheat.  This project will boost local production, enhance food security and stimulate economic growth as part of the National Network of Grain Silos strategy, which aims to achieve a 2.2-million-ton storage capacity and reduce post-harvest losses.
• In fiscal year 2024, the U.S. Department of Agriculture (USDA) committed nearly $300 million that will use U.S. commodities to help strengthen food security across Africa.  These programs provide critical school meals and literacy programming and are facilitating agricultural economic development in nine African countries, including Angola, and Tanzania.  In Angola, USDA will work with World Vision through a $27.5 million McGovern-Dole agreement to provide school meals for more than 80,000 beneficiaries in three provinces.  The project will provide more than 5,000 metric tons in nutritious U.S. commodities and more than 4,000 metric tons of locally procured fruits and vegetables to support the school meals and literacy programming in eight municipalities across the Benguela, Cunene, and Huila provinces.  In Tanzania, USDA will work with Lutheran World Relief through a more than $35 million Food for Progress agreement to support food security for 30,000 beneficiaries through the implementation of climate smart agricultural practices in the poultry sector for smallholder farmers.
• In October 2024, the MCC signed a $458 million compact program with Zambia focused on catalyzing inclusive economic growth in the agriculture and agro-processing sectors.  The program, which includes an additional $33 million contribution from the Government of Zambia, aims to lower the cost of transporting farm products and processed goods to markets, increase the availability of equipment for small and medium farmers and processors, increase financing for infrastructure projects that support agriculture, and catalyze reforms in the agriculture sector to attract greater private investment.  The compact will build on MCC’s $378 million in prior investments in Zambia to remove barriers to trade and improve water infrastructure, distribution, and reforms.
• In September 2024, DFC committed a $5 million loan to Community Markets for Conservation Limited in Zambia to expand its food processing business to support the adoption of sustainable, conservation-based practices in rural Zambia.  This builds on DFC’s $10 million loan to Seba Foods Zambia Ltd., which was announced at the PGI Lusaka Investment Forum in February 2024.  DFC also reached a commitment on a $6 million USAID-sponsored loan portfolio guarantee for Angolan company Kixicrédito S.A. that will support lending to micro, small, and medium-sized enterprises targeting the agriculture sector, including firms along the Lobito Trans-Africa Corridor.

 
Clean Energy 
 
Africa has approximately 39 percent of the world’s renewable energy potential.  The United States is committed to supporting the growing energy needs of people and businesses across the Lobito Trans-Africa Corridor with renewable sources that power communities and industry.
 

• The United States supports Angola’s objective to generate 73 percent of its energy from clean sources by 2027 as well as current and anticipated energy needs across the Lobito Trans-Africa Corridor as new companies and sectors develop.  Through PGI, the Department of State is providing technical assistance to strengthen the Angolan government’s capacity to meet national energy goals, reduce greenhouse gases, and expand access to electricity.
• In Angola, U.S. company Sun Africa, is part of a historic EXIM financing commitment of over $2.4 billion connecting a million Angolans to clean electricity.  This second phase of the project includes an additional 320 megawatts from distributed minigrid systems across four southern provinces alongside clean drinking water projects.  Sun Africa is receiving support from Power Africa, and has received support from a number of Power Africa interagency partners, including USAID, the Department of Commerce, the State Department, and EXIM.
• Through USAID’s Empower Southern Africa program under Power Africa, the United States plans to enter a formal partnership with the Angolan National Transmission Company to realize important cross-border and domestic transmission lines that will help integrate Angola into the Southern and Central Africa Power Pools and supply electricity to the Lobito Trans-Africa Corridor. USAID is launching a new $1.5 million grant from the Power Africa Opportunity Fund to provide solar powered irrigation and refrigeration equipment to support farming communities along the Corridor.
• In September 2024, DFC committed a $40 million liquidity facility to Africa GreenCo, a company operating in Zambia that is expanding renewable energy access.  Africa GreenCo procures renewable electricity through power purchase agreements from independent power producers to sell on the Southern African Power Pool, to both public utilities and private sector buyers.  DFC’s support will help provide a credit enhancement to Africa GreenCo, enabling it to establish a track record as an energy aggregator and trader.
• To accelerate private investment in African infrastructure projects, and in the Lobito Corridor in particular, the U.S. Department of the Treasury will make a $4.2 million contribution to the Alliance for Green Infrastructure in Africa (AGIA) via the African Development Bank, one of the partners collaborating on the development of the Lobito Corridor.  AGIA aims to mobilize private capital at a rate of 20 times donor contributions, meaning that our contribution should catalyze approximately $100 million to build quality, sustainable infrastructure projects.

 
Critical Minerals Supply Chains 
 
Africa will play a central role in the global energy transition and the Lobito Trans-Africa Corridor is rich in the critical minerals that will power the 21stcentury.  The United States is committed to ensuring reliable supply chains by supporting the development of this sector with environmentally respectful processing so more of the value is captured on the continent.
 

• Through the Kabanga Nickel project, LifeZone Metals Ltd., a company listed on the New York Stock Exchange, is investing in bringing critical mineral value addition to Tanzania.  Their support of the development of the Kahama special economic zone, which will include a first of its kind nickel processing facility in the region, can serve as a hub and training center for Tanzanians working across the clean the energy supply chain.  In August 2024, DFC signed a retainer letter with Kabanga Nickel Limited, a subsidiary of Lifezone Metals Ltd., to begin due diligence on political risk insurance to support the Kabanga Nickel underground nickel-copper-cobalt mine site and the Kahama Hydromet refinery site.  In September 2024, DFC also signed a non-binding letter of interest with Kabanga Nickel Limited expressing DFC’s interest in considering a potential direct loan to support the project.
• The United States and Angola are collaborating on principled investments to advance critical minerals projects along the Lobito Trans-Africa Corridor through technical assistance to prepare new operations to secure future debt or equity financing.  During the June 2024 U.S.-Angola Energy Security Dialogue, the Department of State and Angola agreed to elevate our critical mineral partnership.  In September 2024, Pensana PLC received a $3.4 million grant from DFC to fund a feasibility study to double the capacity of its Longonio rare earths mine, design in-country refining capacity, and conduct test work on new ore bodies.  It also includes a $3.2 million DFC technical assistance grant to Chillerton to support the development of a green copper mining project in Zambia.
• USAID, the State Department, and the U.S. Geological Survey (USGS) is announcing $2 million in technical assistance for responsible development and management of Angola’s mining sector.  In November 2023, USGS and the Angolan Geological Institute (IGEO) signed an MOU to enhance scientific collaboration.  This partnership will foster transparency and attract principled investment in Angola’s mineral sector through a three-year program to analyze and interpret newly acquired geoscience data to document Angola’s critical mineral potential while building capacity within the IGEO.

 
Health 
 
The United States is committed to expanding access to health care and strengthening health security, including through PGI investments in health-related infrastructure in the Lobito Trans-Africa Corridor.
 

• The United States and Angola are working together to help accelerate development progress in Angola, including by mobilizing critical investments in Angola’s health infrastructure under PGI.  To support the Angolan government’s priorities in a fiscally responsible manner, DFC has committed to providing up to $150 million in political risk insurance for new water treatment plants to expand access to potable water to underserved communities in southern Angola.  This will further expand DFC’s portfolio of investments in Angola – more than $700 million in commitments – all of which have been committed during the Biden-Harris Administration.

 
Digital Access
 
Access to high-speed internet and associated digital resources helps fuel technological and economic innovation in Africa.  The United States is committed to connecting citizens and businesses across the Lobito Trans-Africa Corridor with highly reliable and trusted vendor technology.
 

• In alignment with the Digital Transformation with Africa initiative, the United States is investing in Angola’s digital architecture, supporting reliable telecommunication networks—using trusted vendors—that will benefit the Angolan people and improve Angola’s digital connectivity to the global economy.  EXIM announced a non-binding, preliminary board commitment to provide $100 million financing for U.S.-owned telecommunications company Africell to expand its high quality, reliable, and affordable wireless cell service to all corners of Angola and upgrade equipment in the DRC with trusted vendor technology.  This builds on USAID’s 2023 launch of a nearly $5 million “Dinheiro Digital é Melhor” or “Mobile Money is Better” project with Africell to spur the development of a vibrant and secure mobile money and digital finance ecosystem in Angola.  USAID and partners are connecting approximately 12,000 new mobile phone users to the Afrimoney platform per month, with 240,000 new users joining in 2024.  In combination with financial literacy training and policy engagement with Angola’s government, USAID and partners are breaking down barriers and reaching those previously excluded from the formal financial system.
• To date, USTDA has provided $13.2 million in funding to prepare digital, transportation, and clean energy projects that will help develop the Lobito Trans-Africa Corridor.  These activities are designed to help unlock several billion dollars in financing and deploy innovative U.S. technologies for the Trans-Africa Corridor’s implementation.
• In November 2024, USTDA awarded a feasibility study grant to Javilian Civils (Proprietary) Limited to support the deployment of terrestrial fiber and access infrastructure connecting inland locations in Central and Southern Africa with subsea cables along the Atlantic Coast.  The project will ultimately increase internet connectivity in Angola, the DRC, and Namibia.
• In April 2024, the U.S. Department of Commerce led a large whole-of-government delegation to the NewSpace Africa Conference held in Angola, representing a growing US interest in space-related cooperation and trade, and in engaging African nations in development of norms for satellite operations.  Part of the Commerce Department, the National Oceanic and Atmospheric Administration offers a wide range of free, open source data, information, and tools that are available to help businesses, communities, and nations address climate adaptation and mitigation, sea-level rise, flooding, coral reef monitoring, and space weather, including a range of early-warning systems for weather, climate, and hydrological disasters.

 
Investment 
 
PGI leverages public funds to unlock private capital investment.  In the Lobito Trans-Africa Corridor, the United States is supporting sustainable economic growth by helping secure investment for firms across many sectors and sizes.

• In September 2024, DFC committed a $13 million equity investment in the African Rivers Fund IV, which will support small and medium-sized businesses in frontier markets in Central and Southern Africa, including Angola, the DRC, and Zambia.
• To promote U.S. investment in Angola, the DRC, and Zambia, Prosper Africa is providing roughly $600,000 of transaction advisory services to firms along the Lobito Trans-Africa Corridor.  These services aim to connect local firms, accelerate economic progress, and increase local and regional involvement in the growing economy around the Corridor.
• Through the United States’ Economic Resilience Initiative, USAID will help advance the economic opportunities presented by the Lobito Trans-Africa Corridor for inclusive growth.  Working with Congress, $4.5 million will support workforce development that matches private sector needs and the industrialization of agricultural inputs and outputs for regional export markets along the Corridor.