CCECC to Invest $1.4 Billion in Tanzania-Zambia Railway Upgrade

The China Civil Engineering Construction Corporation will invest $1.4 billion to upgrade the Tanzania-Zambia railway, enhancing export routes for copper and cobalt. The investment includes $1 billion for rail rehabilitation and new equipment, structured as a 30-year concession. This effort underscores China’s strategic financial role in African infrastructure, amid competition with U.S.-backed projects.

The China Civil Engineering Construction Corporation (CCECC) announced an investment of $1.4 billion for the upgrade of the Tanzania-Zambia Railway (TAZARA), as confirmed by the railway’s operator on March 20. This initiative is aimed at enhancing a significant transportation corridor for copper exports from Central Africa and alleviating logistical issues experienced in South Africa, particularly affecting copper and cobalt export operations.

The TAZARA Authority Chief Executive Officer, Bruno Ching’andu, stated, “The decision to grant a concession follows an in-depth evaluation of TAZARA’s challenges over the years, which necessitated urgent intervention.” Furthermore, CCECC’s investment entails allocating approximately $1 billion for rail track rehabilitation, and the remaining funds will be designated for the acquisition of 32 new locomotives and 762 wagons, enhancing operational capacity.

The concession agreement spans 30 years, consisting of three years dedicated to construction and 27 years for operation and maintenance. However, the negotiation process between CCECC and TAZARA remains ongoing. Additionally, this investment underscores China’s continued financial involvement in Africa, which has seen reduced lending in recent years yet remains committed to infrastructure projects on the continent.

The strategic significance of TAZARA was highlighted in light of the U.S. support for a competing transport corridor, Lobito, which was emphasized by former President Joe Biden. Despite the existing competition, stakeholders such as the Africa Finance Corporation maintain that the Lobito project will advance independently of U.S. engagement.

This renewed investment by CCECC in TAZARA represents a vital resurgence of China’s infrastructural financing in Africa, following a notable decline in lending since 2016, indicating a cautious yet persistent commitment to enhancing the continent’s transportation capabilities.

In summary, CCECC’s $1.4 billion investment in the TAZARA railway represents a crucial development for improving transportation routes for copper exports from Central Africa. This initiative not only addresses logistical bottlenecks but also reflects China’s ongoing involvement in African infrastructure investment, despite a recent slowdown. The concession agreement’s structure indicates a long-term commitment, highlighting the importance of railway infrastructure in continent-wide mineral transport.

Original Source: www.cnbcafrica.com