HomeNewsUganda approves US $395.5m loan for Kampala-Malaba MGR refurbishment

Uganda approves US $395.5m loan for Kampala-Malaba MGR refurbishment

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Uganda’s Parliament has approved a US $395.5m loan the refurbishment of the Kampala-Malaba Meter Gauge Railway (MGR). The approval in a plenary sitting Chaired by Speaker Rebecca Kadaga came after the approval of a report by the National Economy Committee presented by Nakaseke North MP Syda Bbumba.

According to Hon Bbumba, the Kampala- Malaba project is part of the bigger proposed Meter Gauge Railway (MGR) project, which will entail the rehabilitation of the 8.3km Kampala-Port Bell section and the 12.3km Kampala-Nalukolongo-Kyengera section, purchase and rehabilitation of coaches, wagons and locomotives, creation of a railway training school to equip Uganda Railways Corporation (URC) Management and Staff with modern railway skills, and stock new spares for the workshop.

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“If the Meter Gauge Railway Project (MGR) is implemented, the cost of transport by rail will improve from the current average of between US Dollars 0.09 – US $0.13 (per NTK-net tone kilometre) to US $0.05, hence reducing the cost of doing business,” said the MP.

Also Read: Rehabilitation of Longonot-Eldoret-Malaba MGR in Kenya begins

Kampala-Malaba MGR

The 250km Kampala-Malaba MGR connects Uganda’s capital with Kenya at the Malaba border. Money for the project will be sourced from the African Development Fund (ADF) which will provide US $100.7m, the African Development Bank (AfDB) which will provide US $233.2m and the Corporate Internationalization Fund of Spain which will provide US $31.3m.

The new loan requests by the government imply that Uganda’s debt portfolio will swell in the coming financial year 2021/2022 and that the country is moving closer to its threshold set by the International Monetary Fund at 50% debt-to-GDP ratio for developing countries.

If you need more information on this project. Current status, project team contacts etc. Please contact us

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Dennis Ayemba
Dennis Ayemba
Country/ Features Editor, Kenya

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