- Botswana, Zimbabwe, and Mozambique leaders signed a rail and port project deal to export Botswana’s coal exports.
- The African Development Bank committed $4 million for a feasibility study; total funding remains uncertain.
- The project involves upgrading railways and building a new port near Maputo, which is facing environmental concerns.
Leaders from three southern African nations have agreed to advance a rail and port project. This initiative aims to help Botswana’s coal exports its significant coal reserves via a Mozambican port. However, securing the required funding remains a significant hurdle.
The African Development Bank will finance a $4 million feasibility study for the project. Mozambique’s Transport and Communications Minister, Mateus Magal, announced this at a signing ceremony broadcast on state television.
The project involves upgrading existing railway lines through Botswana, Zimbabwe, and Mozambique. It also includes building new connections and a deep-water port south of Mozambique’s capital, Maputo, near a national park that houses elephants and cheetahs.
According to the World Energy Council, Botswana has about 212 billion tons of coal reserves. The country wants to export coal before global efforts to transition to renewable energy leave it as a stranded asset.
Despite the plan’s decades-long existence, it has struggled to gain traction. Financing new coal projects has become increasingly tricky as banks move away from funding fossil fuels due to environmental concerns.
Ncondezi Energy in Mozambique had planned a 300 MW coal power plant. The company signed a construction contract with China Machinery Engineering Corp. in September 2021, expecting Chinese financing to follow. However, the funding still needs to materialise.
In the same month, Chinese President Xi Jinping announced that China would no longer fund foreign coal projects. This led to months of uncertainty for Ncondezi, ultimately abandoning the coal project. The company has since rebranded as Solgenics and shifted its focus to solar power development.
The new rail and port project aims to provide a vital export route for Botswana’s coal. It will connect the landlocked country to international markets through Mozambique. However, the project must overcome significant financial and environmental challenges.
The feasibility study, funded by the African Development Bank, will assess the project’s viability and examine the technical, economic, and environmental aspects of the proposed rail, port upgrades, and new construction.
Environmental concerns play a significant role in the project’s development. The new deep-water port will be near a national park that hosts diverse wildlife, including elephants and cheetahs. Ensuring the project does not harm these natural habitats is crucial.
The global shift towards renewable energy poses another challenge. As the world moves away from fossil fuels, finding investors willing to finance coal projects becomes increasingly tricky. This trend was evident in Ncondezi Energy’s coal power plant project in Mozambique.
Despite these challenges, Botswana remains determined to find ways to export its coal. The country’s significant coal reserves represent a valuable economic opportunity. However, balancing this with environmental considerations and the global move towards cleaner energy sources will be critical to the project’s success.
Botswana, Zimbabwe, and Mozambique leaders have committed to the project, believing it can boost economic development in their countries. However, the project’s future depends on securing the necessary funding and meeting environmental standards.
In conclusion, the new rail and port project represents a significant opportunity for Botswana to export its coal reserves. However, it faces substantial challenges, including financing and addressing environmental concerns. The feasibility study by the African Development Bank will be a critical step in determining the project’s viability.