AfDB and Germany’s BMZ Sign Letter of Intent to Boost Railway Connectivity in Africa

The African Development Bank (AfDB) Group and the German Federal Ministry for Economic Cooperation and Development (BMZ) have signed a letter of intent to strengthen their cooperation in the railway sector and enhance connectivity across African countries.

Strategic Partnership for Continental Connectivity

The agreement was signed in Berlin by Mike Salawou, Director of the Infrastructure and Urban Development Department at the AfDB, and Michael Krake, Deputy Director-General of the BMZ responsible for economic cooperation. The signing took place during the inaugural African European Industry Dialogue on Railways, an event organized within the framework of the InnoTrans trade fair. This gathering brought together African and European stakeholders to discuss investment opportunities and development prospects for the railway sector in Africa.

Beyond Construction: A Holistic Approach

The cooperation extends beyond the mere construction of new lines. The AfDB and BMZ aim to address several critical areas, including:

Transport Costs: Reducing the overall cost of logistics.
Interoperability: Ensuring seamless network compatibility across borders.
Sustainability: Promoting low-carbon railway solutions and sustainable transport policies.
Capacity Building: Prioritizing local skills development, vocational training, knowledge transfer, and the creation of sustainable jobs within the sector.

Key Initiative: The African Railway Competence Center

The first concrete step under this partnership will be a joint feasibility study for the establishment of an African Railway Competence Center. This center is to be implemented by the German development agency, GIZ.

Launch Date: October 2026
Objective: To combine training and innovation to support the modernization and expansion of the continent’s railway networks.

Economic Imperatives and the AfCFTA

For the AfDB, the initiative is also driven by significant economic factors. Currently, Africa’s railway network accounts for only 8 to 10% of the global network. However, the African Continental Free Trade Area (AfCFTA) is increasing the demand for cross-border transport of goods and passengers across a market of over 1.4 billion people.

A better-connected railway network could significantly reduce logistics costs and facilitate trade between African markets.

Supported Projects and Strategic Priorities

The Bank already supports several major projects, including:

The Lobito Corridor
The Standard Gauge Railway (SGR) program in East Africa
The Nacala Corridor
The North-South Railway Corridor in Algeria
The High-Speed Rail network in Morocco
Urban rail transport projects in Senegal and Nigeria

However, infrastructure financing alone is insufficient. According to the AfDB’s press release, Mike Salawou identified five key priorities to foster a true continental railway market:

Leveraging the AfCFTA.
Implementing reforms that encourage a shift from road to rail transport.
Harmonizing standards to ensure interoperability between networks.
Mobilizing greater private capital.
Developing the necessary skills for the operation and maintenance of infrastructure.

Call to Action for Industry and Governments

This agreement opens a space for cooperation that goes beyond the simple supply of locomotives or equipment.

To the European Industry: The AfDB calls for long-term partnerships, local content integration, and robust skills transfer.
To African Governments and Railway Authorities: Stakeholders are invited to prepare solid feasibility studies, initiate necessary reforms, and provide greater regulatory visibility to investors.

AfDB’s Role in Facilitating Growth

The AfDB plans to support these projects through guarantees, blended finance mechanisms, and technical assistance. For both European companies and African actors in transport, engineering, training, and railway services, the development of these corridors could open new market opportunities—provided that infrastructure development is accompanied by a genuine industrial ecosystem and strong local competencies.