THE Islamic Development Bank (IsDB) has approved €650.75m in loans for Uganda’s €2.7bn project to build a new electrified Standard Gauge Railway (SGR) from Kampala to Malaba on the Kenyan border. The financing deal was agreed following site visits by a delegation from IsDB in February.
Securing international backing marks an important step forward for the 272km line that will connect landlocked Uganda to Kenya’s SGR network and the Indian Ocean port of Mombasa. It is expected to cut freight transit times from five days to under 24 hours and reduce freight transport costs by up to 40%.
A contract to build the Kampala - Malaba line was originally awarded in 2015 to China Harbour Engineering Company (CHEC) on condition that Chinese state financing was secured. The $US 2.3bn deal was cancelled in January 2023 after prolonged delays.
A new contract was signed in October 2024 with Turkish civil works contractor Yapi Merkezi. While initial preparatory works have already commenced using Ugandan government funds, the IsDB's contribution provides the critical capital injection needed to transition the project into full construction.
The World Bank is evaluating a range of further financing options.
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