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Angola, Zambia push Lobito Corridor rail project as financing talks advance

Frank Tayali, Minister of Transport in Zambia, said that Zambia hopes to begin work on the Lobito Corridor Railway connecting its copperbelt to Angola’s Atlantic coast before the third quarter 2026. The project is moving forward amid ongoing financing negotiations.

The corridor will connect Zambia's Chingola to Angola Benguela Railway Line at Luacano. It is expected to stretch over 530 km, and it will serve as an important export route for agricultural products and copper.

Tayali, speaking on the sidelines the U.S. - Africa summit in Luanda expressed optimism regarding the multilateral project. He noted the interest of regional stakeholders, the United States and the European Union.

Tayali said, "We've got a developer working with the Africa Finance Corporation to resolve the financial issues and things look very promising." "This is a monumental project, and we are confident in its ability to reduce global food insecurity as well as unlock Africa's arid lands for agriculture."

Jose Massano, Angola’s Minister of state for Economic Coordination, said that the government is committed to facilitating investment like the Lobito Corridor via private sector negotiations. However he ruled out government funding directly for the project. The talks have been focused on clauses in concession contracts, such as potential guarantees requested by financiers.

Massano explained that "we may need to adjust one or two clauses in order to improve the relationship between financiers and operators." Massano said that although these processes are lengthy, the commitment to see them through is strong.

Massano confirmed that Angola has made progress on the planned World Bank funding of $500 million, and the requirements are expected to be met by the end the year.

Massano spoke about Angola's fiscal outlook in the face of volatile oil prices. Massano noted at the Monday summit that oil prices over $70 per barrel, which aligned Angola's budget forecast for 2025, had provided temporary relief to implement economic and social programs.

The oil price fell dramatically on Tuesday, causing Angola to be uncertain about its fiscal projections. Oil prices fell to a two-week minimum on Tuesday, after Israel accepted the proposal of U.S. president Donald Trump for a ceasefire between Iran and Israel. This eased concerns over disruptions to supply in the Middle East.

Brent crude futures fell $2.48 or 3.5% to $69 per barrel at 0927 GMT. U.S. West Texas Intermediate Crude fell $2.37 or 3.5% to $66.14. Massano responded that Angola is open to dialogue, including with the International Monetary Fund to consolidate the public finances, if needed. (Reporting and writing by Miguel Gomes; editing by David Evans).

(source: Reuters)