Tanzania Signs USD 1.2 Billion Standard Gauge Railway Financing Agreement

en.Wedoany.com Reported - On November 4, the Tanzanian government signed a USD 1.2 billion commercial financing agreement for the construction of the Tabora–Kigoma section, Lot 6 of the Central Line Standard Gauge Railway (SGR). The African Development Bank served as the initial mandated lead arranger for the transaction, responsible for structuring the financing and organizing the funds, and provided a partial credit guarantee of up to USD 800 million, the largest guarantee of its kind in the Bank's history.

The financing is provided by a syndicate of nine banks, with Deutsche Bank and Société Générale serving as co-mandated lead arrangers. Other participating institutions include HSBC, Commerzbank, Nedbank of South Africa, Standard Bank Tanzania, First Abu Dhabi Bank, FirstBank UK, and Bank of Africa UK. The financing is divided into two parts: USD 720 million in guaranteed loans and USD 480 million in unguaranteed loans backed by Tanzania's sovereign credit.

This USD 1.2 billion commercial financing is part of the project's overall financing package of approximately USD 2.3 billion, with the remaining funds to be raised through export credit agency (ECA) financing and cooperation with other guarantee institutions. The financing arrangement combines commercial bank loans, partial credit guarantees, and sovereign credit financing to provide multi-channel funding support for railway construction.

The Tabora–Kigoma section, with a total length of 506 kilometers, is Lot 6 of Tanzania's Central Line Standard Gauge Railway project and is being constructed by a consortium of China Railway Construction Corporation Limited (CRCC) and China Civil Engineering Construction Corporation (CCECC). The two parties signed the construction contract with the Tanzanian government on December 20, 2022, and Tanzanian President Samia Suluhu Hassan presided over the project's groundbreaking ceremony on July 20, 2026.

Once completed, the line will further connect western Tanzania to the Central Line Standard Gauge Railway network and link to Indian Ocean shipping routes through the Port of Dar es Salaam. Kigoma is located on the eastern shore of Lake Tanganyika; once the railway is connected with lake transport, it will also provide a new corridor for freight transport and regional trade between Tanzania and neighboring countries such as Burundi and the Democratic Republic of the Congo.