The Nacala Corridor is a regional road/rail route which connects Zambia, Malawi and Mozambique, linking Lusaka to the port of Nacala. The Great East Road, which forms part of this corridor, is being rehabilitated along a 360-kilometre section. Better roads will mean faster journeys and improved safety, thereby providing higher standards for passengers while generating economic benefits.
The project includes road reconfiguration and upgrading measures as well as bridge replacements. In addition to these works, the project also covers the rehabilitation of a dry port (road and rail interchange) at Chipata in Zambia. Complementary road and rail reconstruction in Malawi and Mozambique is already underway.
Improved road infrastructure will have several benefits for the area. As moving from one place to another becomes more efficient and transport costs go down, exports and imports will more easily see growth, which will create jobs and boost the economy as a whole.
To ensure that the project generates sustainable benefits, long-term road sector support will be provided.
This project, promoted by the Government of Zambia’s Road Development Agency, is a good example of successful innovative financing by the EU-Africa Infrastructure Trust Fund (ITF), blending loans and grants to achieve better leverage while complying with lending requirements for highly indebted countries. Through the fund, the loans from the European Investment Bank (EIB) and the Agence Française de Développement (AFD) received interest rate subsidies of €25 million and €10.8 million respectively. Additionally, a grant of €1 million was made available for technical assistance.
Overall, a total of €208.9 million for grant operations was approved by the ITF for the 2007-10 period.