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AfDB Announces €37M Loan for Investment in Mozambique’s Railways

AfDB Announces €37M Loan for Investment in Mozambique’s Railways

The African Development Bank (AfDB) will provide a loan of 40 million dollars (2.5 billion meticals) for Mozambique to purchase rolling stock for the Ressano Garcia railway line in the south of the country.

“The aim of the project is to enable Portos e Caminhos de Ferro de Moçambique (CFM) to finance the purchase of rolling stock (locomotives, wagons and tank containers) for its main corridor, the Ressano Garcia railway line,” says BAD, in a note distributed to the media today.

The line, which connects the port of Maputo to the border with South Africa, generates more than 90 per cent of the volume of rail traffic and represents 70 per cent of the overall volume of rail transport by CFM, a public company.

“The deal includes the purchase of ten 3000/3300 horsepower diesel-electric locomotives, 300 wagons and 120 tank containers. The funds will also cover a three-year maintenance programme for the locomotives purchased and the training of CFM’s maintenance staff,” says the ADB note, which adds that it also intends to mobilise an additional 30 million dollars (1.8 billion meticals) from other potential lenders for the project.

According to the Lusa portal, as well as boosting regional trade, the investment is expected to increase foreign exchange revenues, from 225 million dollars (14.2 billion meticais) in 2022 to 360 million dollars (22.7 billion meticais) in 2036.

“The project is expected to improve families’ access to infrastructure through rail transport services. It will potentially reduce congestion and travel times by two minutes per kilometre and reduce the number of deaths on the road by transferring traffic to the railways,” the note concludes.

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