Southern Africa Trade Tender

Project ID P164847Region Africa eastCommitment Amount Us 380.00 millionTotal Project Cost Us 380.00 millionThe development objective of this project is to reduce transport trade and logistics costs along the Nacala Corridor. Trade costs capture both the direct financial as well non-financial costs including delays and policy uncertainty that users incur in moving tradable goods along the corridor. Reductions in these costs are critical to improve markets access for producers and consumers in the three corridor countries. This includes costs of transportation logistics storage packaging freight forwarding and supply chain management border taxes and fees and the costs of satisfying regulatory requirements including standards and phytosanitary requirements. The project would contribute to improvements in trade connectivity infrastructure trade facilitation and logistics and the operational capacity and efficiency of the corridor.Therearea number of indicators for the project which the team will refine during project preparation. They includeCost to importand exportdisaggregated by mode cargo type and key destinationsAverage freight transport time on the Nacala corridor disaggregated by mode cargo type and key destinationsAmount of throughput along the corridor disaggregated by mode cargo type and key destinations Private investment in key sectors transport and logistics services including agro-logisticsRange and quality of trade logistics servicesUtilization of agglomeration centers disaggregated by commodity types of user The proposed project will be financed by Investment Project Financing IPF with credits to Malawi and Zambia totaling 108 million and grants to Mozambique totaling 75 million. Grants to regional institutions amounting to 5 million will be used to support regional coordination.The IPF is suggested as the most appropriate and realistic instrument as all three countries need significant investmentsinto physical infrastructure to improve border and corridor infrastructure to support to strengthen border and corridor management and capacities for coordination in corridor development. Additionally the team will explore the possibility of introducing Results-Based Financing RBF with Disbursement Linked Indicators DLIs for essential policy change. Project Preparatory Advances PPAs will be pursued as needed to finance necessary feasibility studies design work and safeguards assessments in advance of planned infrastructure interventions. The proposed IPF will not only provide the needed financing but it will also be a tool for sustained knowledge transfer and technical assistance. Other modalities including an MPA and SOPwere reviewed and discussed with GPs and CMUs but will be assessed further during project preparation.