Market News

Summary

• NRZ is negotiating a $115 million facility with Afreximbank to purchase locomotives and wagons and expand freight-haulage capacity.
• The financing would cover 10 locomotives and 315 wagons, as well as repairs to parts of the railway infrastructure.
• NRZ's freight volumes have fallen sharply, from a peak of 12 million tonnes in the 1990s to 2 million tonnes in 2025.
• The railway operator estimates it needs $600 million to upgrade its rolling stock and network.

$115 Million Financing Facility

Zimbabwe's state-owned railway company, the National Railways of Zimbabwe (NRZ), is negotiating a $115 million financing facility with the African Export-Import Bank (Afreximbank) to expand its haulage capacity.

NRZ now operates under Zimbabwe's sovereign wealth fund, Mutapa Investments.

Mutapa Investments Chief Executive Officer John Mangudya said the discussions with Afreximbank are focused on securing funding for:

• 10 locomotives
• 315 wagons
• Repairs to sections of NRZ's railway infrastructure

The financing is intended to increase the railway's capacity to transport freight and support Zimbabwe's mining and logistics sectors.

Refurbished Locomotives and Wagons

Mangudya made the comments as NRZ commissioned three locomotives and 100 wagons refurbished through a partnership with Zimasco, the Zimbabwean ferrochrome unit of Sinosteel.

The refurbishment represents part of NRZ's efforts to improve its available rolling stock while seeking larger-scale investment.

Freight Volumes Collapse

NRZ has struggled for years because of under-investment by the Zimbabwean government.

The company has increasingly partnered with private logistics firms in an effort to rebuild freight volumes.

However, freight transported by NRZ has fallen dramatically:

That represents an approximately 83% decline from the historical peak.

Lithium Exports and Maputo Corridor

On July 21, NRZ said it had begun hauling lithium concentrate by rail to Maputo port in Mozambique in partnership with private operators.

The rail service provides the mining industry with a potentially cheaper transportation option, as most minerals are currently transported to ports by road.

The development is particularly relevant to Zimbabwe's mining sector, where lithium and other mineral exports generate significant demand for transportation infrastructure.

$600 Million Investment Requirement

Despite the proposed $115 million Afreximbank facility, NRZ says its overall investment requirement is substantially larger.

Mangudya estimates that the railway operator needs approximately $600 million to upgrade its:

• Rolling stock
• Railway network
• Supporting infrastructure

The proposed Afreximbank financing would therefore represent only part of the investment required to modernise the railway system.