Zimbabwe Seeks $115m Afreximbank Loan To Revive Rail Network
Zimbabwe Seeks $115m Afreximbank Loan to Revive Rail Network
Zimbabwe is seeking a $115 million financing facility from the African Export-Import Bank (Afreximbank) to rehabilitate its struggling railway system and expand freight capacity as mineral production and exports continue to grow.
The financing is being negotiated by the National Railways of Zimbabwe (NRZ), with plans to use the funds to purchase 10 locomotives and 315 wagons, as well as carry out repairs on ageing railway infrastructure.
John Mangudya, chief executive of Zimbabwe’s sovereign wealth fund, Mutapa Investment Fund, disclosed the ongoing negotiations on Thursday, according to Reuters.
The proposed facility comes amid years of underinvestment in the country’s rail network, which has significantly weakened NRZ’s freight capacity. Freight volumes have dropped from a peak of about 12 million tonnes in the 1990s to approximately two million tonnes in 2025.
Mangudya said NRZ requires about $600 million to undertake a comprehensive upgrade of its rolling stock and railway network. The proposed Afreximbank financing would therefore cover less than one-fifth of the estimated funding required for a full rehabilitation.
The railway upgrade has become increasingly important as Zimbabwe expands production and exports of minerals such as lithium and chrome.
A large proportion of the country’s mineral cargo is currently transported by road to ports, but NRZ is seeking to move more bulk freight onto the railway system, which could reduce transportation costs and ease pressure on the country’s roads.
In July, NRZ began transporting lithium concentrate to Mozambique’s Port of Maputo in partnership with private operators. The arrangement provides mining companies with an alternative to transporting their products by road over long distances to the coast.
The proposed Afreximbank financing has been under discussion for several years. An earlier plan announced in 2023 proposed $81 million for the purchase of nine locomotives and 315 wagons, while $34 million was earmarked for railway infrastructure.
The latest proposal increases the number of locomotives to be purchased to 10.
NRZ said in May that due diligence on the financing was still ongoing and that it was targeting financial closure before the end of the year.
Meanwhile, the railway operator has been relying on partnerships with major industrial customers to restore some of its ageing equipment.
NRZ recently commissioned three locomotives and 100 wagons refurbished through a partnership with Zimasco, a Zimbabwean ferrochrome producer owned by China’s Sinosteel.
The planned investment is expected to strengthen Zimbabwe’s capacity to move minerals and other bulk goods by rail, potentially lowering logistics costs for mining and manufacturing companies while reducing the volume of heavy freight transported on the country’s roads.
However, with NRZ estimating that a complete overhaul of its rail network and rolling stock will require about $600 million, the proposed $115 million Afreximbank facility represents an initial step towards a broader rehabilitation programme.
