Uganda standard gauge railway is gradually taking shape as it officially moves into implementation stage following recent funding. The project has received a robust financing structure that aims to ensure its timely completion. Perez Wambulu, National Coordinator for the SGR project noted that the government has set aside 75 million Euros. The allocated funds will enable preliminary works while the broader financing arrangements are finalized. The coordinator also noted that the project will cover 272 kilometers from Malaba to Kampala in its first phase. Furthermore, he noted that it is an endeavor that is valued at a cost of $2.7 billion. “The government’s contribution accounts for 15% of the financing, while 85% will be sourced through loans from international institutions and export credit agencies,” he added. Once completed, the project is expected to have an immense significance in boosting transportation and enhancing accessibility across the region.
Project Factsheet
Significance
- Uganda’s first phase of the SGR, valued at $2.7 billion, is the 272 km Malaba–Kampala railway line.
- Projected to significantly boost transport efficiency, reduce travel times, and spur regional trade connectivity.
- Improves Uganda’s integration into the East African railway network and reduces dependence on roads.
Scope of Implementation
- Government of Uganda has already pledged €75 million towards advance works.
- Phase one is 272 km from Malaba to Kampala.
- Project contractor: Yapi Merkezi (Turkey), shortlisted after due diligence for timely completion.
Financing Structure
- 15% directly financed by the Government of Uganda.
- 60% from Export Credit Agencies (ECAs) in the form of low-interest loans.
- 25% from Development Finance Institutions (DFIs) like AfDB, Islamic Development Bank, and OPEC Fund.
- The Development Banks have already pledged €400 million to the project.
- Financing structured to be certain, transparent, and affordable.
Scope of Implementation on Uganda Standard Gauge Railway Project
The implementation phase on the Uganda standard gauge railway project is one that stems from its financing structure. 60% of the railway’s funds will be obtained from Export Credit Agencies (ECAs) providing low-interest funding for large-scale infrastructure projects. Furthermore, 25% of the funds are expected to be obtained from Development Finance Institutions (DFIs). These include the African Development Bank, the Islamic Development Bank, and the OPEC Fund for Development. The African Development Bank is one of the institutions that has been on the forefront in financing rail projects across East Africa . These institutions have already pledged substantial support, with the Islamic Development Bank committing €400 million.
15% will come from the Government of Uganda with 75 million Euros already disbursed for preliminary works. Wambulu emphasised that due diligence has been conducted to secure funds at the lowest cost, learning from similar railway projects in Tanzania. “We have structured the financing to be predictable, transparent, and affordable, ensuring that the project does not face delays due to funding gaps,” he said. The contracted company, Turkish-based Yapi Merkezi also came under fire during the briefing on their capacity to deliver the project on schedule. Nonetheless, Wambulu assured that thorough due diligence had been done and the contractors will deliver.
