The Democratic Republic of the Congo has officially joined the Luxembourg Rail Protocol, an international treaty that facilitates the financing of railway rolling stock. The Rail Working Group states that the decision is of strategic importance for Central and Southern Africa, particularly in the context of the development of the Lobito Corridor.
The Rail Working Group, a non-profit association based in Switzerland, welcomed the Democratic Republic of the Congo’s official accession to the Luxembourg Rail Protocol, part of the Cape Town Convention, describing it as a milestone for rail financing in Central and Southern Africa.
The Luxembourg Rail Protocol was adopted in 2007 under the auspices of UNIDROIT, the International Institute for the Unification of Private Law, and entered into force on March 8, 2024. It creates an international legal framework for security interests in railway rolling stock, with the aim of making private financing of locomotives, railcars, and other railway equipment easier and cheaper.
With the Democratic Republic of the Congo’s accession, the treaty gains additional relevance in Africa. The country joins Gabon and South Africa as an African party to the protocol. Mozambique has already signed the document, and other African states, including Namibia, Zimbabwe, Eswatini, Kenya, and Ethiopia, are considering its adoption.
The Significance of the Lobito Corridor
The Democratic Republic of the Congo’s accession carries special strategic weight due to the country’s role in mineral transport and the development of the Lobito Corridor, one of the continent’s most important logistics routes.
The Lobito Corridor is a 1,739 km railway link connecting the mineral-rich Copperbelt region with the Angolan port of Lobito on the Atlantic Ocean. The route is considered essential for raw material exports and for the region’s logistical integration.
Judith Suminwa Tuluka, Prime Minister of the Democratic Republic of the Congo, stated that the country is delighted to have acceded to the Luxembourg Rail Protocol and to become the second contracting state within the Southern African Development Community (SADC).
“We are delighted that the DRC has acceded to the Luxembourg Rail Protocol and is now the second SADC contracting state. As our neighbors also move forward with accession, we look forward to seamless, cost-effective private financing for rolling stock operating on the SADC network,” she said.
More accessible financing for locomotives and railcars
Howard Rosen, chairman of the Rail Working Group, stated that the DRC’s accession represents “a step forward” for the SADC region and for Africa in general, reinforcing the protocol’s role as a practical tool for unlocking railway investments on the continent.
He noted that the protocol can create new business opportunities for manufacturers, operators, and financiers in Southern Africa, especially in light of the recent commitment by the South African export credit agency ECIC to reduce risk premiums when the Luxembourg Rail Protocol is applied.
According to the Rail Working Group, ECIC has indicated that it can apply a reduction of up to 20% on the risk premium for rolling stock financing that meets South African local content requirements, the provisions of the protocol, and other underwriting criteria.
Traxtion: Investments Can Transform Regional Logistics
Jamie Holley, CEO of Traxtion, an African rail freight logistics operator and rolling stock leasing company, said that major investments in modernizing the lines serving the DR Congo from the ports of Lobito and Dar es Salaam make the country an important rail player.
“Major investments in improving the condition of the railways serving the DRC from the ports of Lobito and Dar es Salaam make the DRC an important rail country. The DRC’s accession to the Luxembourg Protocol will strengthen the business case for large-scale investments in trains to operate on this modernized rail infrastructure. Together, these have the potential to transform the region’s logistics landscape,” he said.
An international register for rolling stock
The Luxembourg Rail Protocol introduces an international system for the recognition, priority, and enforcement of creditors’ and lessors’ rights over railway rolling stock.
These rights will be recorded in an international registry based in Luxembourg, accessible online at all times. The Protocol also introduces a single global system for the permanent identification of rolling stock, known as URVIS.
The United Nations has adopted model rules on the permanent identification of railway rolling stock, which establish minimum standards for URVIS numbering. The Rail Working Group argues that extending these rules to include digital platforms could bring additional benefits to the railway industry.
The Seventh Contracting State
According to the Rail Working Group, the European Union, within the limits of its competence, Gabon, Luxembourg, Paraguay, South Africa, Spain, and Sweden have ratified the protocol, and the Democratic Republic of the Congo is set to become the seventh contracting state.
France, Germany, Switzerland, Mozambique, Italy, and the United Kingdom have signed the protocol but have not yet completed their accession. Other states, including Saudi Arabia, Kenya, Malta, Eswatini, Namibia, Zimbabwe, Ethiopia, and Mauritius, are considering ratification.
The Protocol is supported by several international railway organizations, including UIC, UITP, CER, ALLRAIL, ERFA, OTIF, CIT, UIP, and Eurofima, as well as by the African Union, the UN Economic Commission for Africa, and the UN Economic Commission for Europe.
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