The African Development Bank Lends $40 Million To The Mozambique Rail And Port Authority To Buy Rolling Stock For The Ressano Garcia Railway Line
Approved on 31 January 2024, the African Development Bank loan will enable Portos e Caminhos de Ferro de Moçambique EP (CFM) to purchase 10 – 3000/3300 HP diesel-electric locomotives, 300 wagons, and 120 tank containers. Through a $40-million corporate loan to the state-owned enterprise, this aims to help fund its strategic plan for the period 2021-2024. The African Development Bank also plans to mobilise an additional $30 million for the project from other potential lenders. The implementation period is set for 2024.
The 88km Ressano Garcia railway line, between the port of Maputo and the South African border, generates more than 90% of rail traffic volume and comprises 70% of CFM’s overall rail transport volume.
The funding will also cover a three-year maintenance programme for the purchased locomotive and for training CFM maintenance staff.
The Maputo corridor, where the rolling stock purchased under this project is to be deployed, is essentially used to export mineral commodities (such as bulk magnetite, ferrochrome, chromium ore, and coal) from the mining belt of north-eastern South Africa through the port of Maputo, which provides the shortest seaport access.
The project will also significantly increase foreign earnings, which will grow from $225 million in 2022 to $360 million in 2036. During this period, the project is expected to bring the government a cumulative total of $1 billion in tax revenue.
It will strengthen intra-African trade and regional integration by increasing capacity and the volume of goods transported from neighbouring countries by the most efficient route, with Mozambique serving its neighbouring countries of South Africa, Eswatini, Malawi, Zimbabwe, and Zambia, providing them with a port for exporting their products and importing goods.
The project will achieve net carbon savings of 744,511 kilotonnes of CO2 over the period 2023-2035.