Beira Corridor.


The end of the 16-year civil war in Mozambique has permitted the extraction of resources, an activity that had been untenable during the conflict, various major infrastructure projects are now under way to enable exports from the country and its neighbours.

The Beira Corridor connects the Mozambique port town of Beira with Zimbabwe. It has been Zimbabwe's principal point of access to the sea for over 100 years. However, as with the North-South Corridor, this crucial trade route has fallen into disrepair.

Fortunately, the European Investment Bank has recently announced [euro]65m ($87.75m) of funding to rehabilitate the Corridor. Some $56.7m will be used to improve the 680km Sena railway line which runs between Beira, the coal mining town of Moatize and the Malawian border.

The funds contain an allowance for related infrastructure such as radio networks and the construction of supervisory buildings--all designed to ensure that trains run at a minimum of 60km/h.

Although Zimbabwean export volumes via the Corridor have fallen steeply in the last few years, the slack has been taken up by the expanding economies of Malawi, Zambia, the Democratic Republic of Congo and Mozambique itself. This has necessitated improvements to the line.

Moatize coal mines yield about 2.4bn tonnes a year which, if it were all exported via Beira port, would lead to a massive tenfold increase in the volume of goods handled there--if the port were able to handle such an increase. The Brazilian iron and steel giant vale has invested $1.323bn in a mine in Moatize and the Australian company Riversdale has recently been granted a licence for a $810m mine in the vicinity.

So it is no surprise that $31m has been earmarked for an upgrade to the existing port facility to improve access by dredging, and also for repairing vessels. Mozambique's Finance Minister Manuel Chang commented that, as a result of the dredging, that "it will be possible to decongest goods traffic" there.

Some $105m in funding will also come from the World Bank and the EU-Africa Infrastructure Trust Fund will provide a $39m interest rate subsidy. Total costs for the project are estimated at around $263m and it is expected that the line will be open to commercial traffic in early 2010. Much of the balance of funds is scheduled to come from the Danish and Dutch development agencies. "Funding from the EIB to Mozambique has an impressive record, which makes Mozambique one of the biggest receivers of aid from the...

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