African Development Bank grants $40 million loan for mozambique's CFM to acquire rolling stock
The African Development Bank (BAD) has granted a $40 million loan to Mozambique for the acquisition of rolling stock for the Ressano Garcia railway line in the southern part of the country.
The aim of the project is to enable the Ports and Railways of Mozambique (CFM) to finance the purchase of rolling stock (locomotives, wagons, and tank wagons) for its main corridor, the Ressano Garcia railway line, BAD stated in a press release.
This line generates more than 90% of the railway traffic volume and represents 70% of CFM's total railway transport volume.
The investment includes the acquisition of 10 diesel locomotives with 3000/3300 horsepower, 300 wagons, and 120 tank wagons.
The funds will also cover a maintenance program for a period of three years for the acquired locomotives and training for CFM's maintenance staff.
"The project will significantly increase foreign currency revenues, which are expected to rise from $225 million in 2022 to $360 million by 2036. During this period, the project is expected to bring a total of $1 billion in cumulative tax revenues to the government.
The project is also expected to strengthen intra-African trade and regional integration, increasing the capacity and volume of goods transported from neighboring countries through the most efficient route, with Mozambique serving neighboring countries like South Africa, Eswatini, Malawi, Zimbabwe, and Zambia, providing them with a port for exporting and importing their goods.
Furthermore, the project is anticipated to improve household access to infrastructure through railway transportation services. It will potentially reduce congestion and travel times by two minutes per kilometer and decrease the number of road deaths by shifting traffic to CFM.
