Tanzania secures $1.2bn for railway expansion

What the report says

Tanzania has secured $1.2 billion in commercial financing for a major railway project linking its central and western regions, according to The Independent Uganda. The funding will support construction of the 411-kilometre electrified Tabora-Kigoma line, also known as Lot 6, which is part of the country’s wider Standard Gauge Railway programme.

The article says the package is backed by an $800 million partial credit guarantee from the African Development Bank, described as the bank’s largest such guarantee so far. The financing was arranged through a syndicate of nine banks, with Deutsche Bank and Société Générale serving as co-arrangers. The lenders include several international and regional institutions, and the structure combines guaranteed lending with direct sovereign-risk lending.

The railway is expected to improve movement of agricultural goods, minerals and other cargo from western Tanzania to domestic and regional markets. It is also meant to strengthen trade links through the Central Corridor, including connections to the port of Dar es Salaam and onward routes toward the Democratic Republic of Congo, Burundi and nearby markets around Lake Tanganyika. The report says the project could help lower transport costs, expand freight capacity and support jobs and business activity in agriculture and mining.

More broadly, the financing reflects the growing use of development bank guarantees and private capital to fund large infrastructure projects in Africa. The Independent Uganda said Tanzania has asked the AfDB to help structure and mobilise additional funding for its wider railway development programme.