Outlıne of the Presentatıon

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2 Outlıne of the Presentatıon Background and Objectives What has been achieved National Perspective Regional Perspective Estimated Financing Requirements What is Needed

3 Chingola-Solwezi-Jimbe Railway Line Background Among the main priority Zambian infrastructure development projects which not only stands as a derived demand transport infrastructure project from the increasing economic and more especially mining activity sectors but an essential rail link for trade and regional development between Angola and Zambia; AND GETWAY TO THE WEST; Will connect the Zambia Railway Network from Chingola where it currently ends to the Benguela/Lobito Corridor Railway Network at Luacano in Angola through the border town of Jimbe; and The Line is an extension of the railway line from Kalumbila to the Jimbe border town with Angola.

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5 Chingola-Solwezi-Jimbe Railway Line Background (2) Premised on the need to provide capacity to the current and projected traffic derived from the increasing economic and more especially mining activities; Essential to provide an essential rail link for trade and regional development between Angola and Zambia, and a direct gateway for Zambian traffic to the west; Expected to kickstart significant economic development in this remote area of Zambia which is rich in mineral and agricultural potential; To realize the benefits of this project and indeed other projects, the GRZ has acknowledged the need to appropriately engage potential partners and investors; To this effect, the GRZ has established legal and institutional frameworks to guide its partnerships and collaboration, i.e. the Zambia Development Agency Act and the Public Private Partnership Act of 2009 among others; and Moreover, the Government of Angola and the GRZ have committed to realizing this Project as agreed in the Lobito development corridor agreements and bilateral transport agreements currently under negotiations.

6 What has been Achieved The Chingola-Jimbe Railway project has been structured in two phases: Phase 1(290 km): comprises the extension of the railway line from Chingola to Kalumbila and connects Zambia s new and planned mining areas in Solwezi, Lumwana and Kalumbila to the smelters in Solwezi on the Zambia railway current network; A Concession Memorandum of Understanding has been signed between Government and a local private sector developer (North West Railway Co. ltd. - NWR); A Rail Construction permit was issued to North West Railway Co. Ltd; and An Investment License has already been issued by the Zambia Development Agency.

7 What has been Achieved (2) Strong letter of intent to participate in the Project from an Operator and Rolling Stock supplier; A Draft Development Agreement between NWR Ltd and the Government is under preparation and is yet to be signed; Feasibility studies on Phase I were carried out under funding of the NWR Ltd. Based on a reported estimated internal Rate of Return of 15% at a project cost of USD$ 1.1 billion, the project has been evaluated by the Developer to have positive Net Present Value and was proposed for development, construction and operation on a Public Private Partnership (PPP) basis; and the construction of Phase 1 is expected to commence in 2014 and be completed in not more than 2 years.

8 A section of track already laid along the Proposed route of Phase 1 near to the town of Chingola

9 National Perspective included in the current 6th National Development Plan.; has the potential to divert traffic from more costly and inefficient routes and modes but also to unleash suppressed demand. once completed will reopen the shorter alternative route from the port of Lobito through the recently rehabilitated Benguela railway network direct to the Zambian copper belt; Will also link the Lobito Corridor to the North South Corridor through the Zambia Railways network at Chingola; The current railway route from the Zambian Copperbelt to Lobito passes through D R Congo. This route is not fully operational due to a dilapidated 427 km section between Kolwezi and Dilolo in DR Congo; will not only close a missing link on the regional railway network but will integrate the marginalized and undeveloped regions of the North Western Province in Zambia and the Moxico Provinces in Angola to both national and international markets; and Zambia and Angola also anticipate that the railway will carry Zambia mining exports and carry oil and petroleum products and mining inputs as backloads.

10 SADC Perspective identified and prioritized in the SADC Regional Infrastructure Development Master Plan as one the solution with respect to the reopening of the Lobito Development Corridor; The economic benefits thereof are cost effective transportation of heavy freight, reduced maintenance costs for the road infrastructure, reduced transit times as well as cost of moving goods whilst also allowing importation of fuel at lower cost.; The current poor state of railway infrastructure in this region plus the missing links has resulted in bulk and heavy mineral traffic shifting to road transport. This is not financially and environmentally sustainable; and The railway project will also provide considerable employment opportunities both during and after construction. The Project will thus enhance regional trade competitiveness and regional integration. Additionally the railway will open up relatively marginalized regions in both Zambia and Angola for economic development.

11 Financing Requirements Preparation: Phase 2 of the project requires a detailed feasibility, engineering design study: estimated to cost around USD $ 6 million. Investment: Considering that the land scape and geographic features around phase 2 are similar to phase 1, the cost estimate for Phase 2 is USD$630 million. The Lobito/Benguela rail line project connecting Zambia to the Port of Lobito in Angola is to get an US$18 million funding from the African Development Bank (AfDB) to facilitate regional and international trade for bulk cargo such as copper whose production is projected to rise to more than a million tonnes by 2015.

12 What is needed Based on the preliminary assessment, the following is noted: The preparatory activities will be captured and carried out in six components: Feasibility study and detailed engineering designs; Preparation of PPP transaction Documents; Capacity Building; Project Management; Development Partners Round Table; and Project Cost and Financing Plan (The Studies to inform/propose options)

13 Looking Forward to Partnering with you in Southern Africa!! Thank you For Your Kind Attention!