Nacala Corridor Agreement

The project is expected to have a catalytic effect in the region and generate economic benefits for various interest groups, including sponsors, governments and local people. It will significantly reduce transportation costs and increase coal export volumes. Increased mine production will also create employment opportunities in the Tete area, where the mine is located. In addition, additional capacity created along the corridor in the freight and passenger train sectors is expected to contribute to the creation of economic opportunities in the local economy, including the expansion of agricultural trade in the regions. The African Development Bank (AfDB) and other participating countries have signed agreements on financing the Nacala Corridor project. It is an integrated and transformative infrastructure project consisting of a 912 km railway and a port to liberate the western region of Mozambique and Malawi. The total cost of the project is estimated at $5 billion. In addition to the $300 million loan, AfDB also approved technical assistance through the African Private Sector Assistance Fund (FAPA), a multi-donor trust fund between Japan and Austria, to strengthen trade relations and support SMEs and cooperatives in Mozambique and develop the agricultural economy along Malawi`s corridor. The financing agreement, funded in part by a number of financial institutions, including the Japan Bank for International Cooperation ($1.03 billion), $1 billion from Nippon Export and Investment Insurance and $300 million from the African Development Bank, will seek to fully exploit the Nacala Logistics Corridor. The Nacala Logistics Corridor has a total of 912 kilometres of track, all with a width of 1,067 mm. [3] It operates 85 General Electric Dash 9-BBW locomotives and 1,962 pieces of rolling stock. [5] This is a joint investment by Vale and the Mosabrian state-owned company CFM, which provides for the substantial expansion of the Nacala corridor, including rail and port infrastructure, the rehabilitation of existing railways in Mozambique and Malawi, and a new coal port terminal in Mozambique.

The 1,650 km-long Nacala Regional Corridor connects Zambia to the port of Nacala in Mozambique via Malawi. This road, built in the 1960s, has been poorly maintained for many years. This road is considered by the Zambian government as a priority for the country`s development and is an alternative to the Beira corridor, which also leads to the Mozambican coast but crosses Zimbabwe.

13. December 2020 by
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