Special Interview: Our Plans For Lobito Corridor Across Sub-Saharan Africa—US

Special Interview

OpenLife Nigeria reproduces a special interview through a digital press briefing on the United States and European Union partnership to further develop the Lobito Corridor connecting Angola, the DRC, and Zambia. Acting Special Coordinator for the Partnership on Global Infrastructure Investment (PGI) Honourable Helaina R. Matza, took questions from journalists across countries on the Continent. She clarified salient issues and discussed the U.S. investment across the Corridor to accelerate the critical infrastructure development across sub-Saharan Africa and unlock the enormous potential of this region

Opening Remarks by Ms Matza

Thank you so much, and I am delighted to be here. I will make my opening remarks brief just so we can make sure that we take enough time for questions. But let me share a little bit of framing about what the Partnership for Global Infrastructure and Investment is and how the U.S. has chosen to make a very early focus across the continent of Africa.

So the partnership, which we call PGI so we don’t have to keep saying “Partnership for Global Infrastructure and Investment” every time we raise it, was created at the G7 in 2022 between all G7 partner countries in an attempt to find a way that we can materially support closing the infrastructure gap in emerging economies around the world.

We designed the initiative with our partners to help deploy $600 billion of infrastructure investment support over the course of five years. We have, as the U.S. Government, President Biden, committed to make sure that we deploy and leverage 200 billion of those $600 billion.

Since that launch, we’ve been very hard at work. And at the G7 this past spring in Hiroshima, he introduced the concept that we’ve been working on very closely about trying to ensure that we’re helping support infrastructure development and what he calls an economic corridor approach.

And he announced our first project, our first corridor, which was a strong focus on expanding the Trans-Africa connection through an early investment in the Lobito Corridor. And so at that summit, he announced our first kind of tranche of investments, which were mostly focused in Angola but working on the connectivity between Angola, DRC, and Zambia.

So we were delighted not only to be able to announce the deployment of almost a billion dollars of support for new solar development, which we know is just in its final days of getting sorted out before construction begins, but also announcements around our support and intent to provide loan assistance for the rail refurbishment from the Port of Lobito all the way to the DRC border and ultimately to Kolwezi in DRC.

But that was really just the beginning. That was an example of where we were able to take some limited but, we hope, very meaningful U.S. dollars to help deploy transformation and connectivity in multiple fronts – not only in transportation, not only in electricity access, but also work that we’ve been doing in digital connectivity, working with partners to ensure that in the capital city in Angola that we are able to help deploy additional 4 and 5G access – we, working with trusted vendors and, of course, operators that are offering additional services every day across the country. We’re really excited to expand that work not only into the DRC, as I referenced, but of course into Zambia as well.

Just last weekend at the G20 – and you probably see we use these really important gatherings of world leaders as milestones to help bring together additional action and support. So just this past weekend, we were able to announce that the European Union is joining us in our pursuit to develop the full corridor.

And they will be helping us on some of the feasibility work we will be doing for what will be a greenfield rail expansion covering the southern portion of Angola and continuing on through cutting across pretty much the whole country of Zambia.

This is a really important set of infrastructure projects that we think not only helps support regional trade and connectivity to the west, but also that allows us to invest in communities that are operating, living all along those routes in multiple different ways.

So I hope over the course of this conversation I can explain some of the ways that we’re trying to support agribusiness, electricity access, clean energy deployment, and some of the other really important elements that we think are essential to the work that we’re doing on the continent.

We’re delighted that this is really our flagship corridor. We are already starting to announce some additional work, not only on the continent but some other corridors that we are looking forward to really moving forward with our partnerships across the U.S. Government and our partnerships in the G7.

So happy to reflect on any of those as well, but delighted to be the person who gets to run our implementation team for the USG and get to do this great work on the continent. So with that, maybe I’ll turn it back over.

First Question By The Jornal De Angola

“Is there a deadline for the U.S. to turn into reality this investment to support the Lobito Corridor? And are you investing in people, machineries, or other components by investing on the Lobito Corridor?”

MS MATZA: Great question. So we are certainly putting ourselves on very stringent milestones and ultimate attempts for deadlines. Of course, we have our own element associated with how we’re doing our funding stream over the course of these next five years. We’ve been working in really close coordination with all three governments and potential contract supporters and our European partners on moving to feasibility as soon as possible.

So we’re hoping in the next couple weeks, with, of course, our government partners in tow with us, that we’ll be able to negotiate the last elements of what we would really need to be able to do to be able to embark on a full feasibility, which will inform the rest of the project.

I can say, at least from the U.S. perspective, we have already started allocating not just funds but also rearranging some mechanisms to be able to actively start supporting not only the development of the greenfield rail, but to get to your second question, associated projects that we think are able to leverage the connectivity the rail will bring.

So, for example, our MCC, our Millennium Challenge Corporation, is out in Zambia right now looking at some opportunities to be able to connect feeder roads to the rail so we can bring agribusiness in addition to so many of the critical minerals and other resources that we know will be leveraged.

I hope in the case of Angola that conversation evolves, and we are in really good coordination with the government there as well on how we can support additional needs around port expansion, warehousing, and of course, as I mentioned already, continuing to help not only support large-scale solar development but microgrid access in some more remote communities.
So, we’re really looking at this as holistic solutions where we can leverage the initial investment in a massive physical connectivity to be able to help support these associated benefits.

Julian Pecquet of The Africa Report

“Could you talk a bit about the geopolitical value of these investments for the U.S.? Unlike proprietary tech like 5G, any African partner – including China – can potentially benefit from these investments. You mentioned boosting ‘connectivity to the west.’ Can you elaborate on that?”

MS MATZA: Sure. Of course, our interventions are designed for what’s a huge part of our national security policy and our economic policy, which is to support win-win solutions and respond to the requests we’ve received around the world, but specifically across the continent in Africa – the continent of Africa to be able to start more meaningfully investing in infrastructure and associated infrastructure report, which has not been the traditional way, at least over the last several years, that we’ve been showing up on the continent.

Part of our response is to ensure that we’re doing that in a meaningful way, in a way that supports our values and our objectives, which includes supporting democracies, regional connectivity, and ensuring that we’re doing everything we can to create diversity in supply chains and trade routes.

So you can imagine supporting a corridor that could be as transformative as Lobito; there are so many additional co-benefits, not just for the region but for the global economy as well.

Much of the infrastructure that’s being invested in at the request of the various governments that are part of this grouping is around improving connectivity across their borders in every direction, both between Zambia and the DRC, and then, of course, Angola and Zambia as well.

And we are able to also think through different ways that we can support that deployment and come up with more interesting commercial agreements by being able to bring in some of the companies that are already operating on that corridor, namely mining companies as we start to bring on board what we hope will be some additional agribusiness and other industries leveraging those routes.

So we deeply care about the different elements that this will help support. One is food security and connectivity in the region, which has always been at the forefront of our foreign policy. It’s a huge part of our foreign policy agenda around the world and across the continent. And also, doing what we can to help support diversity in clean energy supply chains.

So as the copper-cobalt belt continues to develop, everything we can do to help drive Western and U.S. investment downstream into that sector, how we can work with all three governments on their desires and interest to continue to move forward down that value chain.

And bring on some additional processing and addressing opportunities where they can keep and bring in more of their people to work in these sectors and stay working in these sectors while also supporting many of these materials to move forward on what we think will be additional open access routes is in the ultimate benefit of our objectives when it comes from both, as I mentioned, our general foreign policy approach and how we’re looking at economic development across the continent.

Journalists From The Embassy In Luanda and Onishias Maamba of Zambia News and Information Services

“Following the announcement of this partnership between the EU and the U.S., when is the actual execution likely to start and what major areas are the partners going to explore?” “How much will be spent on the partnership?”

MS MATZA: Sure. And I would love to answer that as holistically as I can. Of course, the timeline isn’t only dependent on how the U.S. Government and the European Union wants and chooses to engage, but also our partners across all three countries. And so we’re working very closely with all three governments to ensure that we are finding some time to get together and actually finalize the initial arrangement that we will need to be able to move forward. And so we believe that we will be ready to embark on pre-feasibility or feasibility work sometime by the end of this year.

Of course, that has to be done in coordination with our partners. So I don’t want to go out too far ahead of our partners in the Government of Angola, DRC, and Zambia. Of course, all of this needs to be developed hand in hand.

I think what we have tried to do is two things: one, demonstrate that there is very high-level and consistent U.S. Government support to ensure that we not only do these initial investments across this corridor, but that we commit to continuing to expand on to the Indian Ocean and we’re taking advantage of every opportunity we have not only to share that message publicly, but also to continue to align our resources. So we think it’s quite significant that the European Union has joined us in saying not only are we doing this alongside the U.S., but we are elevating this as a priority as well.

So far to date, as I mentioned earlier in my opening remarks, we have already allocated around a billion dollars in Angola alone to start doing some of this work. And we will continue to expand what that offering looks like across several sectors.

So as you’re probably hearing in these remarks, the primary concern and interest right now is to ensure that we’re doing everything we can to help continue the rail artery in a way that it actually enters into Zambia and brings that additional connectivity to Angola and the route to the port. That will take some time and I think that we have, I hope, a good plan in movement that will help support those efforts.

All along the way, though, we are intending to help support additional projects in all of the sectors I mentioned already, all moving on different timelines. We’ve already made additional investments since the two timepoints I gave you from the G7 to the G20 on some digital access work where our USAID has started doing some grant work on mobile money and ability to help take advantage of some of the trusted vendors in expansion that’s happening in Angola and associated areas.

So I’m thinking that we’re hopefully at a regular cadence, continuing to announce progress all with the ultimate goal of really bringing this project to fruition in a way that feels real and tangible to everyone involved and everyone that’s observing the work we’re doing.

Michael Phillips of The Wall Street Journal

Reuters reported last week that a lot of the big metal companies are reluctant to commit long term to using the Lobito-to-DRC line. Are you concerned about that development that you won’t be able to get enough of a commitment from the companies that would use the transport? And what do you think that effect might have on the DFC’s due diligence process if they don’t have those kind of commitments?

MS MATZA: Well, thank you for sharing that, Michael. Of course, I can’t speak on behalf of other companies and how they are sharing their views and perspectives externally. I will say we have done a good deal of that front-end diligence. We feel very confident that based on how the consortium is designed for the DRC extension that there will not be issues with as far as they have committed to extend that route. And time will tell if they will want to continue beyond Kolwezi further into the DRC.

In the case of the greenfield rail, those precommitments are going to be an absolute essential element of any sort of agreement or structure we bring together. And so far, I have been very pleasantly – or it’s been a very, very pleasant, optimistic conversation, which is probably the most I can say at this point.

Terence Creamer of Creamer Media in South Africa

Thanks very much for the opportunity. I wanted to just hone in on the feasibility study aspect of it. Could you talk to the scope of that? Is the scope limited to the rail or does it include the port? And then does it also include the copper-cobalt value chain in the DRC? There’s some ambitions there to add value before it’s exported.

And then if you could talk to the cost of that feasibility study. I know you said the timeline is still being finalized, but could you talk to also the funding of that feasibility study? And when will it advance to the stage of a bankable feasibility study and what takes place thereafter?

MS MATZA: Sure. Let me try to tackle that question the best I can. And part of the way that I’m explaining this right now is in support of our partners that are actively reviewing proposals in real time right now on the approach and path forward on how we engage on that feasibility.

So to answer your first question as directly as I can, the idea and the commitment that both the U.S. Government and the European government has made is multifaceted. One is in support of what we think the most complicated element of this will be, which is developing a path forward for a pretty large-scale greenfield rail project.

And so the feasibility that’s initially referenced is focused on that first and foremost, but with an associated commitment that has come from both governments – and once again, I can speak most on behalf of my own – to be able to start looking at all of the associated projects that can benefit from that rail expansion or also leverage that investment.

And that will, I hope, ultimately involve the port. The port is, as far as my understanding, is being actively tendered out right now, so we will have to wait to see exactly what that looks like.

But all the other elements I referenced, whether it’s warehousing or logistical support or working through the elements around the border crossings, we in the U.S. Government are already starting to identify different tools that we can use to help continue layering our support in those investments.

I think the Europeans have committed to the same type of vision and we’re really looking forward to seeing how they start parsing out their approach as well to those additional associated investments.

Kemi Osukoya from Africa Bazaar Magazine

“How will this project help support the integration of the African Continental Free Trade Area across the continent as well as elevate the African markets into global markets? And how can businesses” – this is really good – “how can businesses and investors seize opportunities or get an early start into the African markets through this project?”

MS MATZA: That is a pretty fabulous question. I think one of the driving principles of the Partnership for Global Infrastructure and Investment as a whole, in part, that really is elevated and so visible with the work that we’re doing – the early work we’re doing on Lobito – is around connectivity. The goal is to help support, in everything we do, regional connectivity, greater connectivity within one’s own country to access to markets, as well to each other for the type of trade that can happen and thrive under those conditions.

That’s what I think is so unique about the opportunity set here. This isn’t just about the capabilities to be able to help support Zambia, DRC, and Angola’s access to additional markets with a western-facing access route, although that’s really important because you want to make sure that they have full optionality to be able to participate in kind of every direction, south and east as well. And so this is a really additive element to that, and not just to export but also to be able to import products and be able to have those move in a way that they haven’t been before.

My understanding in the time I’ve spent in the region has indicated that these routes, especially by road, were taking somewhere between two to three weeks, and that was if there wasn’t some massive issue on a particular border crossing if cross-border commerce was needed to be able to – to be able to access those markets.

A completed rail of this scope and size can bring that timeline to – down to three to four days. And that’s not only just to go to Europe or the U.S., but those ports can be used to connect back down to South Africa or other areas as well to help support and alleviate some of the congestion.

So all of this is about connecting these countries to each other and additional market access, and we’re really excited about all these kind of additive elements that we hope that we can help support.
And the agribusiness thing – I don’t want to diminish that.

That is huge. The capacity in Zambia is immense, right? The opportunity set that Angola wants to play as a trade hub and as a facilitator connecting all these resources is really important, and the DRC is working very hard to continue to develop their own sectors in copper-cobalt and help improve access across not only exit routes but within their own country to be able to continue to work their way further down the value stream.

And I’m probably leaving out 10 other pretty amazing examples about what’s happening across those countries and by no means am I trying to leave out any other neighbors that we’re hoping and starting kind of more preliminary conversations with as well.

So we are – we see just so much potential in this corridor and what it can do to service the region, to be able to leverage what we hope will be continued expansion of trade within the continent itself and that this can be a tool that can help expedite that work and make it a little bit easier to enact once countries are signed on.

In regard to how to get involved now, we’re having those conversations every day with companies that are already on the ground in those three countries. Of course, those – all three of those governments are having similar conversations there as well, and that’s part of the reason why we’re being so visible.

We are out there telling you where we want to invest, telling the global community what we hope to do and achieve, and that we’re here to help think about and work with you on how you can get involved. But once again, not just as the U.S., but in our partnership with the governments of Angola, DRC, and Zambia, and hopefully soon to be some more governments as well.

Peter Fabricius

I just wanted to ask you, as a very elementary question: Is this basically – is your focus pretty much on the Zambia-DRC side, because we already have the Benguela railway line, or does it involve quite a lot of sort of rehabilitating of that line as well as new, as you call it, greenfield railway infrastructure on the Zambia-DRC side?

MS MATZA: Yeah. So part of the reason why what I have focused on as some of the new is explaining the kind of larger part of the expansion in Zambia and the connectivity to DRC, is because we’ve made so many of our initial announcements and commitments in Angola. And it’s certainly not the end by any means.

Obviously they’re an essential part not just of this network, but a country that is deeply investing in itself and its capabilities, as I mentioned before, to become this trade hub.

Many of the dollars that we have referenced earlier on have been mostly focused in Angola, whether that’s around some of the digital access work we’ve done, some of the solar deployment we are committed to do in the very near future. And then, of course, the consortium that we helped finance much of their refurbishment will cut through Angola, but a strong focus of it will be, my understanding, on the DRC side.

To be able to continue an expansion loop, though, of course Angola will need to be involved, and we will have to think about what the right path is for additional greenfield rail as well, partially on the Angola side of that border, but to connect to existing rail. But the largest greenfield element will be in Zambia. So this is the initial vision.

This will, of course, be iterated on by all governments involved, not just us. But there’s still more work to do in Angola to connect to what’s there already and help to support the Government of Angola on their goals as well as they continue to expand in their approach to how they’re leveraging this relationship that they have developed with their neighbors to help support further economic development.

So, I hope I offered a little bit of clarity. I didn’t mean to glaze over some of the work that we’re actively discussing in Angola right now.

Final comments by Ms Matza

Just one last comment. I’m really looking forward to staying in touch with this community as we continue to expand not only our work, but when we can continue to talk more closely with all of our partners together with the press as we’re coming together with new ideas and approaches.

Obviously, we are incredibly committed to the work we’re doing here. We’re seeing it as one of the premier models of what the Partnership for Global Infrastructure and Investment can do around the world, and really delighted that we have the opportunity to focus in this part of the world in such an important moment where there is so much potential for all the countries that are involved.
So thank you so much for taking the time. We will do our best to keep you all regularly updated as we have new announcements.

About Honourable Helaina R. Matza

Honourable Helaina R. Matza is the Acting Special Coordinator for the Partnership on Global Infrastructure Investment, U.S. Department of State. Matza has most recently served as the Director of Energy Transformation in the Bureau of Energy Resources at the Department of State.

In this role she led strategic engagement on clean energy and power sector issues, including the Department’s multilateral effort focused on securing clean energy supply chains. Helaina previously served as Director of Climate Diplomacy and Energy Transformation at the National Security Council in the White House.

Helaina has spent the past eight years at the Department of State developing and managing multi-million-dollar innovative initiatives related to energy, climate change and environmental issues.

She has served in a diverse set of roles, including as a lead sustainability advisor developing the Department’s global air quality monitoring program, leading several Bureau of Energy Resources’ policy priorities overseas, and as a lead negotiator on the U.S. delegation at the UN Framework Convention on Climate Change.

Before joining the Department of State, she held positions focused on philanthropic engagement and trade promotion. Helaina holds an M.P.A. focused on global energy management and a B.A. in International Affairs, both from The George Washington University.