The African Development Bank ( AfDB ) has signed a US$40 million corporate loan to Portos e Caminhos de Ferro de Mocambique EP ( CFM ), the Mozambique rail and port authority.

The bank also plans to mobilize an additional US$30 million for the project from other potential lenders.

The loan will help CFM complete its strategic plan for the period 2021-2024, by financing the acquisition of rolling stock for its main corridor, the Ressano Garcia railway line.

The operation includes the acquisition of 10 3000/3300-horsepower diesel-electric locomotives, 300 wagons, and 120 tank containers. The funding will also cover a three-year maintenance programme for the purchased locomotive and for training CFM maintenance staff.

The 88-kilometre line, running between the port of Maputo and the South African border, is CFM's main corridor, carrying more than 70% of its overall rail transport volume.

The Maputo corridor, where the rolling stock purchased under this project is to be deployed, is used to export mineral commodities ( such as bulk magnetite, ferrochrome, chromium ore, and coal ) from the mining belt of north-eastern South Africa through the port of Maputo, which provides the shortest seaport access.

The AfDB says the project will improve logistics and reduce the cost of transporting goods and products using cost-effective, efficient means benefiting from economies of scale. It will lead to a paradigm shift that will improve the corridor's competitiveness, and make it an economical logistics transport solution.

The project should also increase the number of private companies using freight services and ports, reduce congestion and logistics costs, and contribute to the overall competitiveness of companies while generating links with the local economy through local procurement.

The goods transported over the main Mozambique corridors are mainly raw and processed materials, agricultural products, containerized freight, and bulk liquids.