In what will be a major boost in infrastructural development, the East African nation Uganda has just signed a $800 million financing agreement with Islamic Development Bank. The funding will be utilized in supporting projects which include Uganda’s SGR Project. The standard gauge railway is expected to boost general trade in the landlocked according to the finance ministry of Uganda.
The upcoming SGR project will link to the neighboring country Kenya’s standard gauge railway and all the way to the Port of Mombasa in the Indian Ocean.
Also read: China Back as Kenya-Uganda SGR Financier
Uganda’s SGR Project $800 Million Finance Deal Factsheet
Amount: US$800 million (approximately UGX 3 trillion).
Financier: Islamic Development Bank (IsDB).
- US$500 million directly from IsDB.
- US$150 million each from the Islamic Corporation for the Development of the Private Sector (ICD) and the International Islamic Trade Finance Corporation (ITFC).
- An additional US$400 million will be made available by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) to support insurance and reinsurance for the projects.
Duration: Three-year agreement (part of the Country Engagement Framework (CEF) for 2025–2027).
Signing date: May 20, 2025.
Location of signing: IsDB’s 50th Annual Meetings in Algiers, Algeria.
Projects to be financed:
- Standard Gauge Railway (SGR) Development: A key component aimed at enhancing trade and connectivity. The railway will link to Kenya’s SGR and then to the Indian Ocean port at Mombasa, significantly reducing transport costs and transit times.
- Health sector: Construction of regional cancer treatment centers (e.g., in Arua and Mbale), upgrading existing hospitals (e.g., Katakwi General Hospital), and establishing new general hospitals (e.g., in Lwengo).
- Water and sanitation: Projects like the Bukedea Water Works Project and Water Supply and Sanitation Program III.
- Energy infrastructure: Rural Electrification and Connectivity Projects.
- Roads and transport: Road upgrades in Nakapiripirit, Isingiro, and cross-border routes to Tanzania.
- Agriculture and food security: Drylands Development Project in Karamoja and investments in agricultural infrastructure.
- Human capital development: Focus on skills training in agriculture, ICT, petroleum, hospitality, and healthcare, particularly for youth and women.
Also read: Uganda’s SGR Project Allocated Shs2.175 Trillion ($595.5 million) in 2025/2026 National Budget
Uganda’s SGR project details (Malaba-Kampala Section)
The Turkish construction firm Yapı Merkezi has been contracted to build the 272 kilometer Malaba-Kampala section of Uganda’s SGR. It will be conducted at a cost of $3 billion. Additionally, the groundbreaking ceremony for this major infrastructure project was held in Tororo on November 21, 2024, and was officiated by President Yoweri Museveni.
Also, construction is expected to take 48 months, with completion targeted for late 2028. Furthermore, funding for the broader SGR project will come from a mix of sources. These include Uganda’s own resources, export credit financing, and loans from international development partners. Standard Chartered Plc, a UK-based bank, has been identified as one of the potential financiers.
Once completed, the Malaba-Kampala section will play a vital role in linking Uganda to Kenya’s SGR network. This will facilitate direct access to the Port of Mombasa and enhancing regional trade with neighboring countries.
Also read: Uganda Inaugurates Tororo-Kampala SGR Construction Works
Other Projects to be Funded under the Deal
Lastly, other projects that will be funded under the three-year deal will be in health sector, transport, and lastly energy infrastructure.
The agreement was signed by Ramathan Ggoobi of the finance ministry, and the vice president of the bank Rami Ahmed at the Saudi Arabia-headquartered development bank’s annual meeting that was held in Algiers. This was revealed by the Ministry on X on Wednesday.
Also read: $12.8 Billion Uganda SGR Project Commences
