The credit line will allow the Mozambican government to acquire rolling stock such as locomotives, passenger cars and railcars of various types.
“This agreement represents the 13th financing granted by the Indian bank on behalf of the country’s government to its counterpart in Mozambique, whose borrowing from India currently amounts to US$734.44 million”, read the banks media statement seen by APA on Monday.
The Indian bank is providing slightly more than half of the funds needed to upgrade 665 km of the line, which links the rich untapped Moatize coal fields to Beira port, and is seen as vital for coal exports.
Foreign mining companies are banking on Mozambique, which has one of the world’s largest untapped reserves of premium hard coking coal relatively close to Africa’s east coast, a prime location for feeding hungry markets in Asia.
Mozambique’s government insists that any infrastructure development projects also serve other uses, such as non-coal cargo, shipments from landlocked neighbouring states and passengers.