Uganda has appointed Citibank as lead arranger for the syndicated debt financing of its €2.7 billion Standard Gauge Railway, moving the long-delayed Malaba-Kampala line closer to breaking ground. However, full financial close is yet to be achieved.
A Limited Notice to Proceed has been issued, alongside an initial US$83 million tranche of funding, to enable the lead contractor, Yapı Merkezi, to commence work on the 272 km Eastern Line from Kampala to the Malaba border before the end of May. “The lenders are taking their time, but we have a Plan B,” said Bageya Waiswa, Permanent Secretary at the Ministry of Transport, pointing to the early release of funds to the contractor ahead of financial close.
Uganda’s SGR to be Fully Electric
The 272-kilometre fully electrified line, designed for a top speed of 120 km/h, will link Kampala to the Kenyan border at Malaba, forming the first phase of a planned 1,700 km national SGR network. Uganda terminated its original contract with China Harbour Engineering Company in January 2023 after eight years of failure to execute, before pivoting to Turkey’s Yapı Merkezi. The planned funding structure calls for 85% in international loans and 15% in Ugandan public funds, with the World Bank also signalling support following talks with President Museveni.
Finance ministry permanent secretary Ramathan Ggoobi says the railway will cut cargo transport costs by half. Uganda — a landlocked nation roughly 1,500 km from the Port of Mombasa — relies almost entirely on trucking for access to the coast.
Kenya, for its part, is separately pursuing funding for the Naivasha-Kisumu-Malaba SGR extension that would complete the missing link between the two countries’ networks — a corridor that only delivers its full value once both sides of the border are connected.
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