The African Development Bank (AfDB) has signed a $300 million loan agreement for the development of the Nacala Corridor. The development, which consists of the construction of a 912 km railway and a port meant, is meant to unlock the Western region of Mozambique and landlocked Malawi at a total estimated cost of $5 billion. The project has received further financial backing from the Japanese Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI) and the Export Credit Insurance Corporation of South Africa (ECIC) for an overall package of $ 2.7 billion in senior loans. Commenting on the development the AfDB said: “The project is very complex and among the most innovative that the Bank has financed over the past 10 years of private sector operations.” “The Project is expected to have a catalytic effect in the region and create economic benefits for the various stakeholders, including sponsors, governments and the local population. It will enable a significant reduction in transportation costs and increase coal export volumes. Furthermore, additional capacity created in general along the corridor is expected to contribute to creating economic opportunities in the local economy, notably by increasing agricultural trade in the regions.”
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