The CCECC will invest $1.4 billion to upgrade the Tanzania-Zambia railway, enhancing copper export routes from central Africa. The investment addresses logistical challenges and is part of a long-term concession. This move signifies a potential revival in Chinese financial involvement in Africa amid competition from U.S. projects.
The China Civil Engineering Construction Corporation (CCECC) is set to invest $1.4 billion in the upgrade of the Tanzania-Zambia railway, known as TAZARA. This investment aims to enhance an essential route for copper exports from central Africa while circumventing logistical issues in South Africa that have hindered exports of copper and cobalt.
According to the CEO of the TAZARA Authority, Bruno Ching’andu, the decision to grant a concession was based on an extensive assessment of the railway’s longstanding challenges that required immediate intervention. CCECC’s commitment follows a deal signed last year to revitalize the 50-year-old railway.
Approximately $1 billion of the investment will focus on rehabilitating the railway’s tracks, while the remaining funds will be allocated for the acquisition of 32 new locomotives and 762 wagons to increase operational capacity. These announcements were made during the Zambia International Mining and Energy Conference, where Ching’andu addressed attendees.
The agreement regarding TAZARA includes a 30-year concession, divided into three years for construction and 27 years for operation and maintenance. Negotiations are still ongoing. CCECC’s investment marks a substantial resurgence in China’s development financing in Africa, which fell to a 20-year low in 2022, although it had previously reached $28.4 billion in 2016.
Meanwhile, the U.S. government, under former President Joe Biden, supported the alternative Lobito transport corridor, which connects Zambia and the Democratic Republic of the Congo to Angola’s Atlantic coast, with a $550 million loan. Current President Donald Trump has yet to clarify his stance on this project. The Africa Finance Corporation has stated that Lobito will proceed regardless of U.S. involvement, while China remains cautiously engaged in large-scale lending in Africa due to past repayment difficulties faced by certain nations, including Zambia and Ghana.
The CCECC’s $1.4 billion investment in the Tanzania-Zambia railway represents not only a critical enhancement for copper exports but also signifies China’s continued, albeit cautious, financial engagement in Africa. As the region seeks to resolve logistical challenges, TAZARA’s rehabilitation will play a vital role in bolstering trade routes. Additionally, the dynamics surrounding international financing for infrastructure projects reflect growing competition between U.S. and Chinese investments in Africa.
Original Source: www.cnbcafrica.com
