AfDB Pledges $650 Million for Uganda's Standard Gauge Railway

Uganda’s dream of a modern Standard Gauge Railway (SGR) has received a significant boost, with the African Development Bank (AfDB) signaling its intention to provide $650 million towards the project.

The finance ministry confirmed the development, stating that the AfDB’s Acting Vice President for Regional Development, Abdul Kamara, communicated the bank’s commitment to Ugandan officials during the AfDB’s annual meetings in Brazzaville.

This financial backing is crucial as Uganda continues to mobilize funds for the 2.7 billion euro (approximately $3.15 billion) railway line. The project, awarded to Turkey’s Yapi Merkezi in 2024, has already seen preliminary work commence. However, securing the full funding remains a key objective for the government.

Finalizing the project’s financing arrangements is expected to take place during the AfDB’s next appraisal mission, scheduled for the upcoming month. The SGR project aims to construct a 326 km line, a critical step for landlocked Uganda to enhance the efficiency and reduce the cost of trade through its neighboring countries.

Currently, Uganda relies heavily on road transport for its imports and exports, a method that is both time-consuming and expensive. The SGR is envisioned to revolutionize logistics, speeding up the movement of goods and potentially bolstering economic growth.

In parallel efforts, Uganda has been exploring other avenues for financing the SGR, including the issuance of its first sovereign sukuk bond, which is reported to be in advanced stages.