lobito corridor 2

Multilateral development finance institution the African Development Bank (AfDB) signed an MoU in October 2023 to mobilize resources for the development of the Lobito Corridor alongside the U.S., the European Commission, the Africa Finance Corporation (AFC) and the governments of Zambia, Angola and the DRC. Connecting the DRC and Zambia’s copper belts to international markets via Angola’s Port of Lobito, the project will position southern Africa as a global supplier of critical minerals, and stands to serve as a model for other sectors of the economy.

Connecting the DRC and Zambia’s copper belts to international markets via Angola’s Port of Lobito, the project will position southern Africa as a global supplier of critical minerals. The corridor stands to serve as a model for other sectors of the economy. This topic will be further unpacked during the Angola Oil & Gas 2024 (AOG) conference – scheduled for October 2-4 in Luanda. Uniting Angolan government, global investors and regional counterparts, the event promotes Angola as the destination of choice for investors seeking opportunities in natural and mineral resources.  

AOG is the largest oil and gas event in Angola. Taking place with the full support of the Ministry of Mineral Resources, Oil and Gas; national oil company Sonangol; the National Oil, Gas and Biofuels Agency; the African Energy Chamber; and the Petroleum Derivatives Regulatory Institute, the event is a platform to sign deals and advance Angola’s oil and gas industry. To sponsor or participate as a delegate, please contact sales@energycapitalpower.com.

Connecting African Resources to Global Markets

A feasibility study is currently underway for the construction of the Lobito Corridor, and the project partners expect to complete construction in the next five years. At national level, trilateral cooperation between Angola, the DRC and Zambia has not only enabled intra-African trade but laid the foundation for large-scale investments to be made in regional rail infrastructure. The three governments signed the Lobito Corridor Transit Transport Agency Agreement in 2023, while additional MoUs have been signed between the EU and the DRC and between the EU and Zambia for critical mineral and value chain development. The US, DRC and Zambia also signed a deal to support EV battery value chain development.

Meanwhile, public-private collaboration has mobilized additional financing for the project. A consortium comprising commodity trader Trafigura; engineering and construction firm Mota-Engil; and railway operator Vecturis SA have been awarded a contract to manage the logistics of the project.

A 1,300 km railway line, the Lobito Corridor connects the Angolan Atlantic Coast to the town of Luau on the Angola-DRC border, including a 550 km stretch in Zambia – linking the Jimbe border to Chingola in the Zambian copper belt – and a 400 km stretch into the DRC’s mining town of Kolwezi. Collaboration on both national level and between the public and private sectors has served as a catalyst for development, enabling the required financing to be raised and offtake agreements secured ahead of completion.

Lobito: A Model for Regional Petroleum Distribution?

Underpinned by regional collaboration, the Lobito Corridor can be replicated across other sectors of the southern African economy – specifically, the petroleum industry. Angola itself has ambitions to supply the region with petroleum, leveraging proven resources – 2.5 billion barrels of oil and 11 trillion cubic feet of gas – as well as infrastructure to accelerate intra-African trade. Collaboration, infrastructure investments and PPPs, as seen through the Lobito Corridor, stand to further support this goal.

Progress is already being made in this area, with three new refining developments, regional pipeline infrastructure and a focus on petrochemicals, power generation and LPG connecting Angolan products to regional markets. Angola and Zambia signed an MoU in 2021 to develop a pipeline connecting Angola’s planned Lobito Refinery with its regional neighbor’s capital, Lusaka. The $5 billion Angola-Zambia Oil Pipeline will be constructed by private companies in collaboration with Angola’s NOC Sonangol and Zambia’s state-owned Industrial Development Corporation.

Sonangol has also been modernizing and automating the Cabinda gas plant’s filling capabilities from 3,000 gas cylinders to 9,000 cylinders per day, increasing regional availability by 28% while the 750 MW Soyo II combined cycle power plant will increase domestic power generation by 20%. Excess power can be distributed regionally via the Southern African Power Pool – a regional power system born out of cross-border collaboration. As such, models such as the Lobito Corridor stand to play a role in supporting intra-African trade.