Background Press Gaggle by a Senior Administration Official on the Lobito Trans-Africa Corridor

Luanda, Angola MODERATOR: Thank you all for joining for this gaggle. Everything will be attributed to a senior administration official, embargoed until 10:00 p.m. local time. For your awareness, but not for your reporting, our SAO is [senior administration official]. [Senior administration official], we’ll turn it over to you for a few words at the top, after which we'll take some questions. SENIOR ADMINISTRATION OFFICIAL: All right, thank you. So, as you know, the President is going to travel to Lobito, Angola, tomorrow. I'll go through kind of a little bit of the schedule and then go into more of the details. He'll arrive in Lobito. He'll be joined by - at the Port of Lobito and be joined by President Lourenço of Angola, as well as the presidents of Zambia and DRC, as well as the vice president of Tanzania. They will tour the port. From there, they will travel by car to a grain facility - production facility of a company called Carrinho - I’ll explain a little bit later who they are and what they are - where he will tour the facility. It's an agribusiness company. He'll tour the facility by the founder and CEO, Nelson Carrinho. He will then, at that facility, will also meet and get briefed by a number of other company leaders of companies that the United States has financed here in Angola and along the Lobito Corridor, such as Africell, who, if you've been traveling around Angola, you've seen a lot of their signs. They’re a mobile telecommunications company, a U.S. company that just a couple of - a few years ago, there was only a monopoly here of the state-owned company. They entered with U.S. financing support. Today, they have a significant market share already. They are also expanding beyond Rwanda to make sure that people in rural Angola can go from 2G to 3G. 2G is no data; 3G is with data. And actually, we’re going to - we will be announcing shortly some financing for them - package financing for them to support their growth into both neighboring countries along the Lobito Corridor and to expanding to 5G here in Angola. There, he’ll also be greeted by the CEO of Sun Africa, which is a company that has received financing from the Export-Import Bank of the United States. They are building something along approximately 700 megawatts of solar power, in addition to some storage and mini grids. This is the largest U.S. investment in solar power in Africa, here in Angola. It will mean that Angola will have not only a significant portion of its energy from clean sources, but also give the ability to export clean energy to its neighboring countries. He'll also be meeting with a leader from a company called KoBold - it’s with a K; K-O-B-O-L-D, as in David - which is a mining company in Zambia. Initially, it's an American company backed by a number of U.S. well-known financial institutions, including Bill Gates's Breakthrough Ventures. And they made a discovery, a copper discovery in Zambia. It was one of the largest copper discoveries. As you all know, copper is extremely important for both the chips development, as well as for electric vehicles and expanding the grid, which we will need because of the expansion of data centers. He will also meet a leader from a company called Acrow Bridge. That's A-C-R-O-W. They are based in Milton, Pennsylvania. They make pre-fabricated steel bridges, so it’s American steel, American jobs. It’s a unionized company. And they then deliver those bridges here in Angola. I believe the contract is for 186 steel bridges to be delivered here in Angola, and hopefully will expand their operations elsewhere. It’s a great story of creating jobs in America to deliver good commercial benefits here in Angola and in Africa writ large, again, receiving some commercial financing from U.S. government institutions. After he visits with all these companies, he will then join a roundtable hosted by President Lourenço and President Biden, together with the presidents of Zambia, the DRC, and the vice president of Tanzania, and with, in addition, the CEO of the AFC, which is the Africa Finance Corporation, who is a partner in both leading the project, the Lobito Corridor project, a rail project, and is a - well, my understanding is will likely make a financial announcement - financial commitment announcement to the phase two of the project. So why are we going to Lobito? Why is the President going to Lobito? So, the Lobito Corridor really is anchored in the Lobito port itself, which is the gateway in and out of Africa for the critical minerals industry and now for agriculture. The premise behind the corridor is to be able to take American support and financial capabilities that are admittedly limited and to focus them more deeply in one area versus spreading that financial support and effort across many countries. So, instead of a little bit of human and financial resource across the whole continent, choosing corridors where we can have the largest impact. The Lobito Corridor was the test case for this approach, not just for Africa but globally, and has been a very successful proof point in that theory. The rail is a refurbishment of a rail that goes from the Lobito port all the way to the border of the Democratic Republic of Congo and nearby the border of Zambia, and extends all the way to eastern Congo. This means that a cargo of cobalt or copper that takes about 45 days to get from eastern Congo or Zambia to the market by going through Durban, South Africa - by truck, it takes about 45 days. This will take somewhere in the 40 to 50 hours to go the same distance. That is a remarkable not only cut in time, but cut in cost and the ability to get to market, which will then serve to cut the cost, eventually, of batteries and EVS or chips, et cetera. So that is the first piece of what the Lobito Corridor does. The reason the mining industry is so important in this is because by booking capacity in this rail, it makes it more financeable, more commercial. Nothing in what is happening in the Lobito Corridor is aid. It is all about making things commercial, financeable, and for-profit so that they're actually sustainable for a long period of time and has the ability to have maintenance on it and so on. So, getting the critical minerals out is not only an objective to help the United States diversify the supply chain, but it also means that now higher-standard companies from around the world are coming back into the industry in Africa for the first time. So, for many years, the higher-value companies were leaving, and instead, the mining was being done by companies who perhaps have lower standards across - whether it's labor, environment, transparency, corruption - and now you're starting to see higher-end companies with a better set of standards. KoBold is a good example of that. There are others now that are in final negotiations to come back into countries that they left only recently. But once we wanted to work on the corridor, the President wanted to make sure we weren't doing this on one issue alone of critical minerals, but rather how do we use this to raise GDP and support for countries along the corridor. What you'll see is, beyond the investment that I just discussed, like Africell and the others, laying fiber-optic cable in Angola and along the rail to expand Internet connectivity, faster connectivity across a larger swath of land. Countries that are land-locked, like Zambia and DRC, to a large degree, have a hard time raising their ability to feed themselves and to bring products to not only international markets, but even to their neighbors. So, the rail suddenly opens up the ability to deliver commodities and food stuffs and equipment into - all the way to eastern Congo and Zambia. Both countries, Zambia and DRC, have fresh water, have arable land, and yet are importers of food. What you'll see in this facility that the President is going to go to, where the roundtable is going to be Carrinho, is the company that has built silos for storage so that you can get food crops into cold storage so they can last longer, which means that he is able to go to farmers across Angola and say, “Anything that you can farm, I will purchase,” and then be able to deliver. That has reduced the dependency of Angola already on certain products from a 100 percent dependency on imports to near zero and expanding. So we're working with - the U.S. government with Carrinho. How do you expand that into the broader region, into Zambia, into DRC, so that along the rail, now, if you're in Zambia and you have the Zambezi River that has an enormous amount of fresh water, and yet they are importing food - if the agriculture there can be developed from small farms to large farms, and be able to sell into this corridor, we're not only expanding it for critical minerals, but suddenly this corridor is now solving food security concerns across the corridor. So this is the overview of why the President has gone not only all the way to Angola, but all the way to Lobito. And it's a major investment for the U.S. The PGI initiative that we've talked to you about before is an initiative that is the leader in this. Under this presidency, we've already spent, in this corridor alone, nearly $4 billion, but that's just U.S. There's a lot of other participants in this. The EU is coming in. The Italian government has provided, I think, $320 million of investment. The Africa Finance Corporation, as well as the Africa Development Bank, are all part of this and growing. So, this is going to be a multibillion-dollar investment in lasting infrastructure that will not only not only build up these businesses, but bring about a change in attitude that the President mentioned in his public remarks today of increasing the transparency, increasing the standards of labor, increasing the environmental protection standards, all that have been - really, this continent has suffered enormously from investments that have not cared about any of those things and has taken the resources out and left behind no better economies, no advanced communities. And so, the idea behind this corridor is that it will ensure that it doesn't only come to take resources, but rather build up GDP, build up communities, build up towns, and increase the level of economic development for the towns and the communities around these businesses, as well as the country as a whole, while not adding crushing debt terms the way they have with other investors. I will stop there. MODERATOR: Great. With that, we’ll take a few questions, and we're hoping to keep it focused on the visit tomorrow. Q So, as far as just the rail project in particular, the big kind of new financial commitment is the AFC announcement, right? SENIOR ADMINISTRATION OFFICIAL: So, DFC, we haven't formally announced it; we've talked about the (inaudible). But DFC, the Development Finance Corporation in the United States, has approved a $553 million package. And I won't speak to what the AFC will announce tomorrow. That's up to them. Q Gotcha. And is that specifically for phase two? SENIOR ADMINISTRATION OFFICIAL: That's for phase two. So what we did was the United States came in with phase one at $553 million, and that was good enough for the two European companies that are building the rail and operating it, in addition to us helping them get secured usage commitments of the rail. That’s at phase one. Once the world saw that we were serious about this, it sort of paved the way for everyone to be like, “Oh, this thing is actually for real.” And then they came in and supported, specifically after the President made a big push at the G7 last year that unlocked a lot of financing from others. Q Can I just look forward to AGOA? What is the future of this rail corridor and AGOA? I know that's up to Congress. But do you see that some of these countries that are eligible for AGOA - Zambia, Congo, and Angola - could expand their AGOA exports? And do you have a roadmap for that? SENIOR ADMINISTRATION OFFICIAL: I think there's no doubt that should Congress expand AGOA, that this would be a benefit. I think the point here is that it would support these countries' ability to increase their exports, and will allow them to be not only connected to global markets for exports, but actually to other African markets. So, there is a critical need for Africa to be connected not only to the world and to itself. And so, the President spoke about it today. We talk a lot about it in aviation, where sometimes you have to fly very far away to go to your neighboring country, but having the critical infrastructure. So, hopefully AGOA can strengthen it. But this is not reliant on AGOA. AGOA will just be a increase in support for it. Q Right. But AGOA is, like, value-added products, and this rail line is going to bring in, like, raw materials. Is this is going to give an opportunity for these countries to export value-added products? SENIOR ADMINISTRATION OFFICIAL: So I disagree with the premise that it’s for raw products. There is - right now, only raw product is coming out. But I think what this rail does - an increased - in order to get to higher-value products, you need a few things. One of them is affordable and reliable and abundant energy. So, the build-out of the energy system allows you to then build the value added. And I fully expect - we are already discussing with companies that are looking - I can't announce it for them, but I would assume in the next weeks and months you'll see some of the companies, the mining companies and other service companies, building out infrastructure to create value added. So instead of just the raw material, you'll be ultimately exporting something. Now, I can't tell you how far up the chain it will be refined, but I think there's a lot of refinement to be done here in Africa. Q And on just the fi- - so the investment from the DFC, it's $553 million? SENIOR ADMINISTRATION OFFICIAL: Yes. Q That's what's coming tomorrow? SENIOR ADMINISTRATION OFFICIAL: That is part of the - when we talk about the over $3 billion of support in Angola, and then I think nearly or over $4 billion in total for the Lobito Corridor, the President is going to announce tomorrow an additional $600 million in financing for projects for the broader Lobito Corridor, and that takes you above thenumber that we had talked about today. Q Got it. So, additional $600 million is what (inaudible). SENIOR ADMINISTRATION OFFICIAL: Yeah. But that's notjust for rail. That's for the broader - and not just in Angola; that's for the broader corridor. Q So that's separate from the 553 (inaudible). SENIOR ADMINISTRATION OFFICIAL: Correct. Q Yeah, I just want to make sure that they’re separate. SENIOR ADMINISTRATION OFFICIAL: The $553 million is for the rail itself, a phase one rail in Angola. And then there are all kinds of things that we're doing to support the broader corridor. Some of that's what I talked about - Africell, Sun Africa, the feasibility study that we have to do for the phase two. Phase two is essentially building the entire rail system inside Zambia, which we are pretty far along on the planning of that. We expect shovels on the ground by the end of 2025 or early 2026. And there's a lot of work that goes into identifying routes. Do a brand-new greenfield rail. So the part from Angola all the way to east Congo is already being used. And then phase two is much more expansive, more ambitious. I should say there's a phase three, which is then connecting it onwards all the way to Tanzania. That's why the vice president of Tanzania is going to be here. Q Okay, got it. And then, just wanted to - can you just talk about what this financing looks like going forward, with President-elect Trump coming in? And the dollars that have already been allocated to the project, can you kind of detail how it's being spent, how much has been spent already? Like, I don't know if you can kind of break that down. SENIOR ADMINISTRATION OFFICIAL: So, I think the most important way to tie the two ends of your question is to say that the money that I'm referring to, most of it has gone through the process already. It's been approved. The ones that require congressional notification have already been congressionally notified. They have finished their notification periods. They have not had any holds. There is broad bipartisan support for these projects. And, look, at the end of the day, if you want to talk about living in an era of global competition, specifically with China, this Lobito Corridor is the heart of that. You can't stand up and say I want to compete with China - not adversary, but compete with China - and not support what's happening here, which is why I have every confi- - which is why it's had bipartisan support already across Congress, and why I have every expectation that when the new administration comes in, they will - I don't know how many things they will continue around the world, but I believe they will continue this project because it is good for American national security, it's good for American economic security, and it builds on what a Republican-controlled Congress during the Trump administration, which is to build that, that created the DFC for this kind of purpose. And we've had Republican staff, Republican members of Congress, senators who've been to Angola, DRC recently. These are members who've never traveled to Angola before, but this is why they're coming here. So, I think there is quite a bit of support for this. Q Sorry, just a clarifying question. The $553 million, that's for phase one, not two? SENIOR ADMINISTRATION OFFICIAL: Correct. Q How long will this take? You said that the Tanzania point - I mean, shovels in the ground for part of it, starting in 2025. SENIOR ADMINISTRATION OFFICIAL: Zambia. Zambia. Q Right. And then, the Tanzania is like the long goal. And right now, there's a portion that's already being used to east Congo. SENIOR ADMINISTRATION OFFICIAL: Right. This is all going to be in pieces. So, nothing is going to - this is not a “we wait until a big reveal and something all works.” So we had a test cargo a couple months ago that went from east DRC all the way to Lobito. It doesn't mean the rail is fully operational yet, but we wanted to see how it works. So that's how I can tell you how many hours it takes, because we had that test cargo. That will, probably in the next year or so, will be - the work inside Angola will be complete, next year-ish. Right around that time is when the shovel is going to go in the ground in Zambia. Again, the feasibility study is now done, and now we have to do all the other project preparation, which, again, is expensive and takes time. There's already pieces of rail that exist if you go further east. So now it's about, Patrick, how do you make sure that all the rails connect to each other. So you don't have to build the whole way to Tanzania; you just have to build the spurs that interlink the rail that already exists all the way to the port in Tanzania. So, that will give you that - what the President said in his comments at the Slavery Museum - of connecting for the very first time a truly transcontinental (inaudible). Q What's the prediction for that, for it being (inaudible)? SENIOR ADMINISTRATION OFFICIAL: I don't know. I think it's hard for me to make that prediction. I think if all goes well, which construction projects sometimes do and sometimes don't, I would say Zambia would then take probably two, three years to complete, and then - but some of the rest of the work could happen simultaneous, concurrently with the Zambia work. The Chinese are involved in a TAZARA section, which is they’re partnered with Zambia and Tanzania on part of that. And so that will connect into this. So we'll have a lot of different pieces to this rail. So my guess is, by the end of the decade, you can have a really fully functioning rail that goes coast to coast. Q And do you hear frequently from these countries that you've been working with on the Lobito Corridor that they don't have secure investments from their other investment partners? That's been a big theme of what we've been hearing about. Without explicitly saying the names of the other partners, (inaudible) more reliable? SENIOR ADMINISTRATION OFFICIAL: I’m sorry, who are the other partners? Q China and Russia. That the U.S. would be a more reliable investor. That's what the U.S. is offering. Do you hear from these leaders that some of these other investments are falling short; that they need somebody to come in and be reliable? SENIOR ADMINISTRATION OFFICIAL: I think that the investment from the United States versus from others, it's not about more or less, it's about different. We hear a lot about others coming in with very large checks, build a lot of stuff, but that is with high interest rates on the debt, the terms are really difficult, and it doesn't come with any of the commitments to their society. And so, what you see happen - and again, the President mentioned in the speech today - 10 years, 5 years later, 10 years later, you go to a country, whether it's here in Sub-Saharan Africa or in Southeast Asia or South Asia, or even Latin America - I mean, look what's happened. The resource is gone, right? They've taken it out. But there's - the debt in the early years is low interest rates, and then it expands with time. In some cases, it's over 11 percent, which is crushing. And there's no support for the local communities where these investments are. Now, politicians today are wise enough to know that “my predecessor left me this debt and a community that is anti-investment,” because they've seen that their kids are working in these facilities, or they're getting paid a dollar a day. They know their drinking water is worse because nobody is providing security into making sure that they're not polluting all the waterways or moving rivers. So what they're looking for is a different kind of investment that guarantees the opposite of all those things. And what I hear from heads of state, you know, consistently, is, “I don't want the other investments, but if I have to choose between a Chinese investment and no investment, I will choose a Chinese investment every day of the week, or the Russian.” So if you give us a choice, we'll be there. And what the President committed at the African Leaders Summit was to create a different offer, and that's what he charged me with trying to implement, and that's what he's done. And that's why President Lourenço said today in his opening comments to the President, “You lived up to your word. You gave us your word at the leaders conference, and you've actually lived up to it with what you've done.” Q Can I follow up on something you just said, that the hope is that this will attract, like, higher-quality investments. But how - is there a mechanism in place to verify that the companies that will take part in this project, like actually have higher standards regarding, like, labor rights, environment, transparency, et cetera? SENIOR ADMINISTRATION OFFICIAL: Yes, there is. I mean, the whole point of the U.S. participating in this is that part of the DFC or Ex-Im Bank or MCC or USAID, any of these organizations in the U.S. government, they vet the companies for that kind of action, and not just before they give the loan facilities or debt facilities, but rather during the project itself. Second, with the fact that the U.S. government is saying we are effectively putting the American flag on these projects, we have a responsibility. And so, there's a continued U.S. - you know, shining a light on these projects to make sure that it is done in the proper manner. MODERATOR: We have time for just a couple more. Q You know, I know this was supposed to come earlier, and the hurricane sort of derailed everything, but is there a fear that this is coming so late in the administration that even though this is, you know, good work that's going to certainly have a lasting impact, that it's going to be overshadowed by the President leaving office? SENIOR ADMINISTRATION OFFICIAL: I don't think so at all. Look, the President was supposed to be here earlier, but I don't think it makes any difference. What's being highlighted here, guys, is the - you know, we're so used to the cynical of “government comes and we tout.” This is, like, literally, a transformative initiative for the United States that I think it's not about whether the Trump administration is going to continue it, which I have very little doubt, but rather, I think this is the playbook for administrations to come. There are a lot of things that we've done around the world. I mean, PEPFAR is, I think, George W. Bush, and we're still talking about what a great initiative that was. Everybody thinks the DFC was a very good thing globally. So, yes, from administration to administration, some things get carried on. So, I truly believe that this is something transformative. But look at the politics of this. And I don't want people to miss this: Nobody - when I came this morning to the palace, before the arrival ceremony, the ministers that I was talking to, the one thing that every single one of them separately said to me, “What we've been talking about is that no one in this country, at our age, would have believed that the United States would be here, the president of the United States would be here,” based on the relationship that we once had. We weren't just on the other side of the Cold War. We were very much on the other side of the Cold War. During a civil war here then, we were sort of a player. Q It was like a hot war with Cuba, a proxy war. SENIOR ADMINISTRATION OFFICIAL: Yes. This was basically a proxy hot war with the Soviet Union. So to go from that - and, by the way, that - yes, we recognize, you know, reestablished relations in 1993. But when I came here, you know, and started talking to the Angolan government just three, four years ago, the relationship was not this. Today, this is one of our strongest relationships in all of Sub-Saharan Africa. It's one of our best friends. President Lourenço has been one of our truest allies. That is unimaginable (inaudible). It didn't happen because we decided to go the usual route of aid. It happened - or political promises. It happened because they could see that we were making promises and we were keeping them at every step of the way. The fact that we made over $3 billion of investments here that are meaningful investments to people in this country is what drove it. And so, the blueprint here is: If you get more - with aid, you get a certain amount; you've done the right thing. You should continue to do it. But the investment strategy that many presidents have talked about trying to - how do you go from aid to trade, we've heard that from many presidents. But the ability to actually do it is so different. And that's why I don't take the cynical view of, “Oh, it’s the end of the administration, didn't have to come, it's not going to matter.” On the contrary. The one thing that I hear from Republicans consistently since the election is, “Can you talk to us more about this? How do we continue this?” People asking for what kind of jobs they need to create for this and so on. So it's not just my hard-to-hide enthusiasm for this project, but it is that I truly believe that this is a blueprint for the future. And, by the way, we've copied this in other parts of the world. When was the last time we took something we did in Africa and then copied it elsewhere? We created a corridor in the Philippines that is entirely - together with Japan - just with - you know, the Luzon Corridor - just based on this. And I think if we had more time - I think we're trying to do the same thing in East Africa, in Liberia and in Ghana, building out data centers. I mean, that's the competition with China. It's not getting China - by the way, it's not about getting China out of Africa. On the contrary. I would love China to invest more. But hopefully, when countries say, “Wait a minute, I can go to the United States and there'll be no child labor, they'll get higher wages, more investment in my country, and I won’t have crushing debt,” and tell the Chinese, “If you want to compete, give me a better offer.” And so China, then, is investing in Africa at higher standards. Great. We're not going to close the infrastructure gap in Africa with the United States and the G7 alone. I can promise you that. So having China here would be great, but not the way they've been doing business (inaudible). Q Just one quick one. Has there been any progress in finding a buyer for that Congolese mine that was being sold to a Chinese buyer? SENIOR ADMINISTRATION OFFICIAL: Chemaf? Q Yes. SENIOR ADMINISTRATION OFFICIAL: So, one, they announced that - there was some announcement that it was sold, and then there was an announcement, “No, we didn't sell it.” I think that the Congolese - you'd have to ask them, but they would like to make sure that their industry and their economy is diversified. They are having discussions with other companies. So it's really not my place to speak for them. MODERATOR: Thank you all. Thank you very much. The post Background Press Gaggle by a Senior Administration Official on the Lobito Trans-Africa Corridor appeared first on The White House.