Uganda’s Standard Gauge Railway (SGR) project is a planned rail infrastructure development aimed at improving regional transport connectivity. Uganda signed an $800 million financing agreement with the Islamic Development Bank to support infrastructure development, including the SGR, as part of efforts outlined by the country’s finance ministry.

The railway is intended to connect with Kenya’s existing standard gauge railway network and extend to the Port of Mombasa on the Indian Ocean. The project is also designed to facilitate the movement of goods across the region and enhance connectivity between inland areas and coastal export routes.

Kenya is also advancing its end of the SGR as it launched the construction of Phase 2C of the Naivasha-Kisumu-Malaba SGR extension project.

Kenya’s President Dr. William Ruto and Uganda’s Yoweri Museveni presided over the groundbreaking ceremony. The move marks a monumental step toward strengthening regional transport and trade connectivity. President Ruto noted that the railway is a colonial infrastructure traversing Kenya from the Coast to the Western region and into Uganda.

Moreover, he noted that it has profoundly shaped the geography and economic trajectory of the nation. Once complete, Ruto notes that the railway will be fundamental in catalyzing trade and unlocking economic potential.

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.

Project Overview

• Project Type: Standard Gauge Railway (SGR)
• Objective: Enhance regional connectivity and trade logistics
• Key Link: Connection to Kenya SGR and Port of Mombasa

Financing Structure

• Total Financing Package: $800 million
• Lead Financier: Islamic Development Bank

Breakdown:

• $500 million – IsDB
• $150 million – Islamic Corporation for the Development of the Private Sector
• $150 million – International Islamic Trade Finance Corporation
• $400 million – Islamic Corporation for the Insurance of Investment and Export Credit (insurance support)
• Agreement Duration: 2025–2027
• Signing Date: May 20, 2025
• Signing Location: Algiers, Algeria

Key Developer

• Government: Uganda

Core Rail Section

• Section: Malaba – Kampala
• Length: 272 km
• Project Cost: ~$3 billion
• Contractor: Yapı Merkezi
• Construction Start: November 2024
• Completion Target: Late 2028
• Construction Duration: ~48 months

Project Scope

• Development of national SGR network
• Cross-border linkage to Kenya SGR
• Improved cargo movement to Indian Ocean export routes

Project Status

• Stage: Financing secured; construction underway (Malaba–Kampala section)

Additional Financiers (Potential)

• Standard Chartered (identified as potential financier)

Strategic Significance

• Reduces transport costs and transit times for goods
• Enhances regional trade across East Africa
• Strengthens Uganda’s access to global markets via Mombasa

Other Sectors Funded Under Agreement

• Health infrastructure (hospitals, cancer centers)
• Water and sanitation projects
• Energy and rural electrification
• Road infrastructure upgrades
• Agriculture and food security programs
• Skills and human capital development

Also read:  $12.8 Billion Uganda SGR Project Commences