ZAMBIA: Zambia Railways Ltd has appointed Pangaea Securities as transaction adviser to raise US$60m from development finance institutions and the private sector. This is to complement a €50m EU Railway Sector Support Programme grant which is to be used to rehabilitate infrastructure, signalling and telecoms.
Zambia is aiming to strengthen rail transport as a strategic national asset. ZRL’s Strategic Business Plan envisages increasing annual freight volumes from 800 000 tonnes in 2024 to 2·6 million tonnes by 2028, with Phase 1 of the plan requiring capital investment of US$113m to improve infrastructure and signalling. This cash injection would build on previous rehabilitation works undertaken with support from multilateral donors.
The improvements aim to increase ZRL’s efficiency and service reliability, helping to grow its revenue by attracting more customers and supporting national economic growth by facilitating more efficient trade routes and regional connectivity.
Pangaea Securities CEO Ceasar Siwale said ‘Pangaea has built a strong reputation as a trusted financial advisory firm specialising in infrastructure financing, capital mobilisation and transaction structuring across the region. Our core strength lies in our ability to identify the right sources of capital, structure bankable transactions and engage effectively with a wide network of financiers.’
Public-private collaboration
ZRL Managing Director Cuthbert Malindi said railway transformation all over the world requires collaboration between the public and private sectors.
‘By bringing on board Pangaea Securities, we are leveraging private sector expertise to help us optimally structure and mobilise the additional financing required to complement the EU grant’, he said on March 19. ‘Partnering with Pangaea Securities allows us to structure bankable transactions, attract credible patient capital while accelerating the implementation of our rehabilitation agenda. Public-private collaboration is essential in bridging funding gaps and ensuring sustainability.’
ZRL recently awarded South African company Worldwide Rail & Mining Solutions a contract to modernise six EMD GT-class locomotives using a vendor-finance model, with the contractor funding the work and being repaid as the locos generate revenue.
Malindi said ‘Zambia Railways Ltd today can be likened to a stool with three broken legs. These legs represent rolling stock as the first leg, railway track infrastructure as the second leg and operational efficiencies as the third leg. For the stool to stand firm and balanced, all three legs must be fixed, comprehensively and simultaneously. This is the approach we are taking.’
