DBSA funding advances Lobito railway modernisation

The Development Bank of Southern Africa has backed a major financing package to rehabilitate and expand Angola’s Lobito railway, strengthening a trade route designed to connect Central Africa’s copper and cobalt-producing regions with Atlantic markets.

The bank is providing up to $200 million in senior debt alongside $553 million from the US International Development Finance Corporation. The $753 million package has reached financial close, allowing work to proceed on the railway and associated freight infrastructure after financing agreements were signed in Washington in December 2025.

The investment will support the rehabilitation, upgrading and long-term operation of about 1,300 kilometres of railway between the Port of Lobito and Luau, near Angola’s border with the Democratic Republic of Congo. The line forms the western section of the wider Lobito Corridor, which extends through the DRC towards Zambia’s Copperbelt.

Mpho Mokwele, group executive for coverage and origination at the Development Bank of Southern Africa, said the corridor would improve access to international markets, lower transport costs and shorten journey times. She described infrastructure as a catalyst for regional trade, industrial development and economic integration.

The Lobito Atlantic Railway concessionaire is controlled by a consortium involving commodities trader Trafigura and Portuguese construction group Mota-Engil. Rail operator Vecturis has also participated in the project. Africa Finance Corporation and Eaglestone worked as financial advisers, helping structure and mobilise the debt package.

The operational railway links the mineral terminal at Lobito with the DRC border and connects onward to Kolwezi through the Congolese rail network. Kolwezi lies at the centre of one of the world’s most important copper and cobalt-producing areas.

Project sponsors expect the investment to increase annual transport capacity roughly tenfold to about 4.6 million tonnes. The upgraded railway could also reduce critical-mineral transport costs by as much as 30 per cent, improving the competitiveness of exports that currently depend heavily on congested road routes and longer journeys to ports on Africa’s eastern and southern coasts.

Rail operators are seeking to raise services from about 12 trains a week towards 20 by 2027. Transit between Lobito and Kolwezi can take about seven days under favourable operating conditions, offering mining companies a shorter route to the Atlantic than established alternatives through South Africa, Mozambique or Tanzania.

The railway’s expansion is expected to remove about 5,000 heavy vehicles from regional roads. That shift could ease congestion, improve road safety and reduce emissions, although the scale of the environmental benefit will depend on locomotive efficiency, freight growth and the pace at which cargo transfers from road to rail.

The project has become a central element of efforts by Angola, the DRC and Zambia to develop the Lobito Corridor as more than a minerals-export channel. The three governments have established a transport facilitation framework intended to simplify customs procedures, coordinate border management and encourage agricultural, manufacturing and logistics investment along the route.

A separate greenfield railway is planned to connect the existing line with Zambia. Africa Finance Corporation is leading development of that section and has approached African and international lenders over a broader funding requirement estimated at between $3 billion and $5 billion. Institutions under consideration have included commercial banks and development finance agencies from Africa, Europe, the Middle East and the United States.

The proposed Zambia link would provide copper producers with direct rail access to Angola’s Atlantic coast. It would also support industrial facilities processing minerals before export, an objective increasingly emphasised by African governments seeking to retain more value from their natural resources.

The corridor has strategic importance for the United States and European Union because copper and cobalt are essential for electricity networks, batteries, electric vehicles and defence manufacturing. Western governments view Lobito as an alternative supply route at a time when China occupies a dominant position in mineral processing and holds extensive commercial interests across the African Copperbelt.

Supporters argue that the project can attract investment into farming, renewable energy, telecommunications and local processing. Reliable transport could reduce the cost of importing machinery and consumer goods while opening markets for producers in inland provinces.

Critics have warned that the corridor may primarily serve large mining companies unless governments enforce local procurement, employment and community-development commitments. Questions have also arisen over freight pricing, land rights and the potential displacement of households living near railway property in parts of the DRC.