The Lobito Hall, a 1,300km stretch of railway from Kapiri Mposhi on the sting of Zambia’s copper belt to the port of Lobito in Angola, was first laid down within the early 1900s by colonial powers to move important minerals from central Africa to its Atlantic ports.
Beforehand often known as the Benguela Railway, the venture is ready to hold 1mn tonnes of copper a 12 months by 2030 and is being revived because the flagship funding within the EU’s new technique for overseas support: muscling up and looking for geopolitical positive factors for its money.
The EU and its member states are investing €2bn within the venture alongside the US, the African Improvement Financial institution and personal firms, in what Brussels’ worldwide partnerships commissioner Jozef Síkela has held up as a brand new mannequin for the bloc’s improvement programme.
“This is agriculture, this is logistics, this is vocational training alongside transport,” Síkela informed the Monetary Instances, arguing that the EU introduced a extra sustainable strategy than China’s huge Belt and Highway scheme.
“It connects, of course, the African copper belt to global trade and Europe’s clean tech industry, so I will not hide that we are getting copper. But once they will be able to process [and] refine the copper, then they can use the infrastructure for shipping products with higher value added.”
However non-governmental organisations and a few officers in improvement companies worry that Lobito is emblematic of a contemporary gambit for affect and sources that has uncomfortable echoes of colonial-era Europe’s strategy to the continent. They’re involved that the EU is sacrificing its values in a race for pure wealth with China, the US and different world powers.
“The Lobito corridor is a very good example of the problematic nature of where the EU development budget and policy [are] headed,” mentioned Frank Vanaerschot, director of Counter Steadiness, a coalition of improvement and environmental NGOs. “It’s not really clear how this will favour economic opportunities and interests for the local development.”
Lobito underlines a notable shift within the EU’s perspective to improvement support, coming at a time when funding for world support initiatives has been radically minimize by the US but additionally as different western governments tighten their purse strings.
The US has indicated it may make investments as a lot as $5bn within the Lobito venture, underlining its strategic significance for western international locations as they take a extra transactional strategy to improvement support.
The bloc has put its €300bn International Gateway scheme — introduced in 2021 to supply grants, loans and ensures for initiatives around the globe — to work in favour of its financial and overseas coverage targets: securing important minerals and power provides, and curbing irregular migration.
“The development paradigm is changing,” mentioned Dora Meredith, Europe director on the overseas coverage think-tank ODI. “There are more transactional narratives around and moral narratives have less traction with policymakers.”
An ODI report on the EU’s improvement agenda famous that in a time of stretched public budgets, arguments for improvement can be more practical in the event that they might be “linked to domestic priorities in a tangible way”.
The EU is by far the biggest donor within the OECD, accounting for 61 per cent of abroad improvement help in 2024, in line with OECD figures, though increasingly of that cash has stayed inside Europe because the bloc channels funding in the direction of Ukraine to help it by means of Russia’s full-scale invasion.
Whereas the EU finances for improvement and overseas help will obtain a major enhance, doubling from about €108bn to €200bn within the bloc’s subsequent joint finances beginning 2028, it is going to be educated on extra strategic targets in addition to offering funding alternatives for European firms overseas.
The initiatives that the EU is championing by means of International Gateway embody web connections in central Asia utilizing European expertise and a hub for inexperienced hydrogen in Namibia, with further investments to coach native employees.
The concept, EU officers say, is to supply a extra holistic strategy than China’s $1tn Belt and Highway infrastructure scheme, which has left a number of growing international locations loaded with unsustainable ranges of debt.
“While on the surface Global Gateway may be perceived as mainly an investment push promoting the private sector, it now comes with a more comprehensive approach, which is crucial and very welcome, to expand its development impact,” mentioned a UN official.
Alexander De Croo, the brand new head of the UN Improvement Programme, informed the FT that there was a logic to the EU’s change of strategy. “Capital allocation in what you would call the developed world is actually quite hard these days because the demographics are not very conducive for higher returns because we are societies with an older demographic.”
That made growing international locations “very attractive because the needs are there. You can start from a blank page and the demographics are actually very attractive because this is often a very young population,” mentioned De Croo, a former Belgian prime minister.
International Gateway had “crystallised” an evolution of improvement support over the previous few years, he added. “The global discussion these days is dominated by discussions about security, about migration, about illegal drug trade” — “symptoms” of points equivalent to excessive poverty and inequality that improvement support ought to be used to deal with.
Some UN officers and NGOs, nonetheless, fear that specializing in large-scale funding initiatives, and making funds conditional on points equivalent to curbing migration, may come on the expense of humanitarian support and native improvement initiatives equivalent to colleges or hospitals.
“You need both. You need to have humanitarian assistance. You need to have investment,” mentioned Raouf Mazou, assistant excessive commissioner for operations on the UN’s refugee company. “Border control is legitimate . . . but if you do that without investing or providing humanitarian assistance you are going to waste your resources.”
“This should really be the priority: tackling inequality, ending poverty, to make sure that there’s local added economic value, that it puts local communities at the heart of decision-making processes,” Counter Steadiness’s director Vanaerschot mentioned.
“If you then look at the fact that some of the projects at the heart of the strategy are mining projects and big energy projects, that makes it very sensitive to problems happening,” he mentioned, pointing to human rights abuses and environmental dangers related to these sectors.
Within the case of the Lobito hall, officers and NGOs have warned that the venture would profit European international locations however ran the danger of making little added worth for native communities.
“There has always been self-interest, but now it is just more raw, frank and sharp,” mentioned a senior official working in improvement. “Global Gateway was always supposed to be complementary to [official development assistance]. Our concern is that it will become an export credit agency to promote the private sector.”
However Síkela insisted that regardless of the European curiosity, International Gateway “should be balanced and it should be to a mutual benefit”.
“I don’t believe in zero sum games,” he mentioned.
