The China Civil Engineering Construction Corporation will invest $1.4 billion to upgrade the Tanzania-Zambia railway (TAZARA), enhancing a vital route for copper exports. The investment will address logistical challenges caused by South African bottlenecks and improve TAZARA’s infrastructure with new equipment. This move reflects China’s renewed commitment to African projects amid a cautious lending strategy due to previous debt issues.
The China Civil Engineering Construction Corporation (CCECC) is set to invest $1.4 billion in enhancing the Tanzania-Zambia railway, known as TAZARA, a critical conduit for copper exports from central Africa. This investment aims to alleviate logistics bottlenecks in South Africa that have hindered exports of copper and cobalt commodities.
According to Bruno Ching’andu, the CEO of TAZARA Authority, the decision to engage CCECC followed a thorough assessment of TAZARA’s long-standing challenges, which require urgent intervention. “The decision to grant a concession follows an in-depth evaluation of TAZARA’s challenges over the years, which necessitated urgent intervention,” Ching’andu noted.
The $1 billion earmarked out of this investment will be allocated to rehabilitate TAZARA’s railway tracks, with the remaining funds intended for the procurement of 32 new locomotives and 762 new wagons, enhancing operational capacity. The statement regarding this investment was made during the Zambia International Mining and Energy Conference, where Ching’andu addressed attendees.
The agreement encompasses a 30-year concession that separates into three years of construction activities and 27 years devoted to operational management. However, discussions regarding the final terms of the agreement are still ongoing. Notably, previous U.S. support for a rival transport corridor known as Lobito has not deterred the commitment to TAZARA.
The investment signifies a pivotal resurgence in China’s capacity to lend to African nations, following a decline to a two-decade low in 2022 compared to its peak of $28.4 billion in 2016. Following instances of debt defaults in various African countries, including Zambia and Ghana, China has adopted a more measured approach to financing large-scale projects in the region.
The CCECC’s significant investment in the Tanzania-Zambia railway represents a strategic effort to address logistical challenges affecting central Africa’s copper export capabilities. This initiative underscores both the importance of TAZARA as a critical transportation line and China’s continuing commitment to infrastructural development in Africa. The ongoing negotiations and structured concession period highlight the complexities involved in such large-scale projects, especially amid competing interests.
Original Source: www.cnbcafrica.com
