(2009-06-11) Zimbabwe could benefit from a project through a EUR65 million European Investment Bank (EIB) loan to Mozambique meant for the rehabilitation of the Beira Corridor.
The EU-Africa Infrastructure Trust Fund was set up within the framework of the EU’s response to the 2005 Gleneagles Declaration on Africa to support infrastructure projects with a cross-border or regional impact in sub-Saharan Africa.
Plutarchos Sakellaris, EIB Vice President responsible for lending operations in Africa, said the loan will be complemented by an additional EUR29 million interest rate subsidy from the EU-Africa Infrastructure Trust Fund, at a ceremony to mark the official signing for the loan in the country’s capital Maputo.
The Beira Corridor project is of crucial economic importance to the SADC region as it could create efficient links between the countries, facilitating international trade and commerce. The corridor has a road and railway connection to Zimbabwe and Beira has always been basically a transit port, handling the import and export cargoes of Zimbabwe other countries in the region since the beginning of the last century.
The port of Beira was founded in the late 19th Century during the scramble between the Portuguese and the British over the occupation of land in eastern southern Africa
A EUR23 million rehabilitation programme will benefit the port of Beira as well as countries such as Zimbabwe, Mozambique itself, Zambia, Malawi and also the Democratic Republic of Congo.
“We are delighted to cooperate with other international donors and notably with the World Bank as well as the EU member states and the European Commission through the EU-Africa Infrastructure Trust Fund to support this project which will significantly reduce transport costs in the Beira Corridor. We are convinced that the benefits of this investment will reach beyond Mozambique’s borders and the involvement of the Trust Fund serves to underline the positive impact the project will have on the region as a whole.“
Sakellaris says improving Mozambique’s sea and inland transportation systems as well as those of surrounding landlocked countries of southern Africa will see the project speed up regional economic growth and contribute to overall poverty alleviation. The package will aid improvements to the Sena railway line which links Beira both to the coal mining town of Moatize and to the Malawian border as the refurbishing of the Beira port access channel at an additional cost of EUR42 million.
Business opportunities have also attracted private players, with LonZim Plc, a company listed on the Zimbabwe Stock Exchange. Although its main target is building a portfolio of investments primarily in Zimbabwe, the company indicated in a press statement in April 2009 that it may also make investments in business outside Zimbabwe especially in the Beira corridor.
It is reported that the EIB and Trust Fund financing will be made alongside funding from the World Bank and from Dutch and Danish development agencies.