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Zambia and DRC to implement an Innovative transboundary battery and Electric vehicle Special Economic Zone

15 avril, 2024
Zambia and DRC to implement an Innovative transboundary battery and Electric vehicle Special Economic Zone

Lusaka, Zambia, 15 April 2024 – The Economic Commission for Africa (ECA), Sub-Regional Office for Southern Africa (SRO-SA) and Afreximbank in collaboration with the Ministry of Commerce, Trade and Industry organised a technical meeting to review the findings and recommendations of the prefeasibility study for implementation of a Transboundary Battery and Electric Vehicle industry Special Economic Zone in the Democratic Republic of Congo (DRC) and Zambia.

The joint Battery and Electric Vehicle (BEV) initiative on the establishment of a value chain in the electric battery and clean energy sector is supported at the highest political level in both countries. In the DRC, the President established the Congolese Battery Council and appointed its leaders by Presidential Decree No 0314/02/2023. In Zambia, the Ministers of Commerce, Trade and Industry (MCTI), Finance and National Planning, Mines and Minerals Development and Technology and Science were specifically tasked by the Republican President, to spearhead the initiative and a technical committee to support the processes on the initiative was inaugurated. Following the signing of the framework agreement in March 2023, Afreximbank and UNECA retained ARISE Integrated Industrial Platforms to prepare a prefeasibility study on the Transboundary Special Economic Zone. ARISE submitted the draft prefeasibility report to the two member States in December 2023 for their review.

The overall objective of the workshop was to review the prefeasibility study for completeness and accuracy of the issues presented; assess the depth of its coverage, the accuracy of the analysis and the completeness of the report’s observations and conclusions as guided by the terms of reference; provide inputs and recommendations towards improving the quality of the report through additional information to close the gaps in the analysis and recommend any specific actions needed to take the process forward to the next stage.

In the welcome remarks delivered by Ms Nalituba Mwale, Director for Administration in the Ministry of Commerce, Trade and Industry, on behalf of Honourable Chipoka Mulenga, MP, the Ministry outlined the milestones achieved by the joint initiative and emphasised the high-level commitment by both countries to the success of the project. She cited, the Africa Business Forum - 24th to 25th November 2021; signing of the Cooperation Agreement in April 2022; signing of the framework agreement for the establishment of the SEZ in March 2023; the identification of land for the SEZs in both countries the  engagement of ARISE IIP in March 2023 to conduct a prefeasibility study and the launch of the study in April 2023.

She indicated that, “Zambia and DRC are home to at least 70 percent of minerals required to actualise this vision. The Joint Initiative aims to utilise the mineral complementarities to enable the two countries to unlock economic opportunities and strengthen the value chain to produce battery precursors and batteries for electric cars”.

Ms. Oluranti Doherty, Director Export Development, Afreximbank spoke about the importance of reinforcing the policy, legal and regulatory framework to facilitate the development of the SEZ. She reminded the participants that the purpose of the workshop was to critically assess the extent to which the prefeasibility report provides the required environment and the full range of opportunities for stakeholders along the value chain. She assured participants that, "We shall assess readiness, identify key action points, chart a path towards successful implementation with clear timelines and tangible targets. Moreover, we will deliberate on mechanisms for collaboration among stakeholders." Ms. Doherty highlighted the importance of an agreed roadmap for the development and implementation of the Project to galvanize support from other stakeholders. She reiterated the commitment of Afreximbank to the accelerated implementation of a project of such strategic importance to the two Governments.

In her remarks, Ms. Eunice Kamwendo, Director, ECA Office for Southern Africa, emphasised the benefits of the BEV initiative in the two countries especially, contribution towards socio- economic development and structural transformation;  value addition to the minerals,  attraction of domestic and foreign direct investment into the sector; creation of sustainable jobs, contribution to economic transformation and the facilitation of manufacturing agglomeration and also the generation of knowledge and technology to support value addition and the deepening of linkages.

She noted that this initiative, “presents an immense opportunity for transforming regional economies and the entire continent through mineral-based development. With a shift from internal combustion to electric vehicles, the battery electric vehicle market is poised to grow to US$8.8 trillion by next year, 2025, and US$46 trillion by 2050 — a nearly six-fold increase in market value over the next 25 years.  The surge in demand for rechargeable batteries, driven by smartphone usage and renewable energy storage needs presents vast opportunities for Zambia and the continent to propel development anchored on the clean energy transition. Recent data from S&P Global Market Intelligence on global exploration spending in 2023 and early 2024 shows the rising dominance of lithium, nickel, copper and cobalt as target commodities in the budgets of many companies in direct response to the surge in the BEV sector”.

The technical session included a detailed presentation of the findings and recommendations of the Prefeasibility Study by the ARISE IIP team led by Animesh Ahaskar, General Director followed by plenary discussions on the on legal/regulatory framework and the technical aspects.

The second day of the workshop was dedicated to wider stakeholder engagement both public and private to enhance knowledge and understanding of the objectives of the initiative and the current roadmap. The participants included representatives of Zambia Revenue Authority, Zambia Consolidated Copper Mines, Bank of Zambia,  Zambia Association of Manufacturers, Zambia Vehicle association, Zambia Electric Mobility Innovation Alliance, Industrial Development Cooperation and representatives from Ministry of Technology and Science, Ministry of Mines, Ministry of Trade and Industry, and Ministry of Green Economy.

The Ministry, Afreximank and UNECA appreciated the participation of stakeholders in the technical meeting and underscored that the review provided a platform for all stakeholders to delve into the details of the prefeasibility study to deepen understanding of the challenges and opportunities inherent in establishing the electric vehicle and battery and clean energy value chain. The need to proceed with speed in towards implementation was underscored.