Afreximbank and ECA sign Agreement to establish Special Economic Zones for Electric Vehicles Batteries in DRC and Zambia

Afreximbank and the United Nations Economic Commission for Africa (ECA) have signed a Framework Agreement with the Democratic Republic of Congo and the Republic of Zambia to establish Special Economic Zones (SEZs) for the production of Battery Electric Vehicles (BEVs) and related services. This move will accelerate the manufacture of pre-export value-added products, enabling these countries to capture more value within their states and create new demand for skilled engineers with technical expertise, providing a significant boost to local labor markets.

Under the terms of the Framework Agreement, Afreximbank and ECA will act as the Project’s financial and technical partners, respectively. The two institutions will lead the establishment of an Operating Company (OpCo) in consortium with investors (both public and private) from DRC and Zambia, as well as international investors such as Afreximbank’s impact fund subsidiary, the Fund for Export Development in Africa (FEDA). This OpCo will develop SEZs dedicated to the production of battery precursors, batteries, and electric vehicles, in both the DRC and Zambia.

ARISE Integrate Industrial Platform (ARISE IIP), a pan-African infrastructure developer, has been selected as the technical consultant to conduct the pre-feasibility study for the establishment of the SEZs in DRC and Zambia. The project will deploy well-established and proven EV technology that will enable both countries to exploit their mineral resources at scale.

The DRC and Zambia are well positioned to establish leadership in the strategically pivotal electric vehicle (EV) sector, being well-endowed with the resources necessary to produce battery minerals. The DRC accounts for approximately 70% of global cobalt supply and 88% of cobalt exports, and the two countries collectively contribute 11% of all copper supply globally. Mining is also a critical sector for both states, contributing 70% of Zambia’s foreign exchange, while cobalt accounts for 26% of the DRC’s exports.

The signing of the Framework Agreement is a strong commitment by the governments of the DRC and Zambia, Afreximbank, ECA, and other partners to promote inclusive development of the Battery Electric Vehicle value chain, rendering the DRC and Zambia globally competitive investment destinations. Afreximbank firmly believes that Industrial Parks and Special Economic Zones are critical tools the continent can deploy to fast-track its industrial infrastructure development, promote Intra-African Trade, accelerate the implementation of the AfCFTA, and facilitate Export Development. This intervention also demonstrates Afreximbank’s commitment to promoting climate finance solutions that will reduce carbon footprints – in alignment with global decarbonization trends and a pan-African narrative around encouraging a just, sustainable, and responsible energy transition.

Antonio Pedro, interim Executive Secretary of ECA, hailed the agreement as “an important step in ensuring we have the right enabling policies in place for the region to benefit from the so-called green mineral boom.” Mr. Pedro underscored the agreement’s importance to the implementation of the AfCFTA and the region’s path to achieving sustainable industrialization and economic diversification.

A global transition towards green energy and rapid decarbonization has exponentially increased demand for Electric Vehicles (EVs) as well as investment in battery-powered storage systems. For Afreximbank, this intervention adds to the institution’s climate finance credentials, establishing it as a leading financier to energy transition projects which develop the industrial sophistication of key African markets.