The China Civil Engineering Construction Corporation (CCECC) will invest $1.4 billion in upgrading the Tanzania-Zambia railway (TAZARA), enhancing a vital route for copper exports. The project involves track rehabilitation and the acquisition of new locomotives and wagons. This investment underscores China’s strengthened commitment to infrastructure development in Africa despite recent cautious lending practices.
The China Civil Engineering Construction Corporation (CCECC) will allocate $1.4 billion to enhance the Tanzania-Zambia railway (TAZARA), as confirmed by the railway operator. This investment aims to improve a crucial route for copper exports originating from central Africa while alleviating logistical obstacles in South Africa, which have hindered copper and cobalt shipments.
TAZARA Authority CEO Bruno Ching’andu noted, “The decision to grant a concession follows an in-depth evaluation of TAZARA’s challenges over the years, which necessitated urgent intervention.” CCECC’s investment includes $1 billion for rehabilitating TAZARA’s rail tracks. The remaining funds will be invested in acquiring 32 new locomotives and 762 new wagons to enhance transport capacity, according to Ching’andu.
Ching’andu made this announcement during the Zambia International Mining and Energy Conference, where he engaged with potential investors and executives. The concession awarded will span 30 years, comprising three years dedicated to construction and 27 years for operational maintenance, although negotiations are still ongoing between the involved parties.
In contrast, the United States has been promoting a competing transport corridor for minerals known as Lobito, which connects the mineral-rich Democratic Republic of the Congo and Zambia to Angola’s Atlantic coast. Although there are active U.S. interests in Lobito highlighted during former President Joe Biden’s term, current President Donald Trump has yet to clarify his administration’s future involvement in the project.
The investment by CCECC in TAZARA significantly enhances China’s financial engagement in Africa, especially following a notable decrease in lending, which reached a 20-year low in 2022. Previously, China invested over $5 billion in a modern rail project in Kenya and secured various railway construction contracts in Nigeria. However, its recent strategy reflects a more cautious stance on substantial lending due to repayment challenges, including defaults by countries such as Zambia and Ghana.
The substantial $1.4 billion investment by the China Civil Engineering Construction Corporation in the Tanzania-Zambia railway marks a pivotal development for the region’s transport infrastructure. It reflects China’s ongoing commitment to enhancing connectivity and trade in Africa, especially amid competition from U.S. initiatives. This project not only aims to upgrade crucial rail infrastructure but also signals a cautious yet significant approach to foreign investment in the face of rising concerns over debt sustainability in African nations.
Original Source: www.cnbcafrica.com
