The African Development Bank To Provide 231.3 Billion Shillings To Fund The Construction Of The SGR Connecting Burundi And DRC
The Tanzanian government signed a financing loan agreement for the second phase of the construction of the standard gauge railway (SGR) from Tabora to Kigoma and Uvinza to Malagarasi, at the Ministry of Finance in Dar Es Salaam on 23 February 2024.
In addition to the SGR financing loan agreement, the government also signed a contract enabling the Tanzania Agricultural Development Bank, with both contracts totalling 398.7 billion Tanzanian shillings, of which 231.3 billion shillings are for the construction of the railway.
Speaking after signing the contracts, the Minister of Finance, Dr Mwigulu Nchemba, said, “The financial requirements for the second phase of the SGR construction are significant; thus, the government has agreed with the AfDB to guarantee the government to obtain approximately 8.1 trillion Tanzanian shillings as a loan from capital markets to fulfil the government’s intention to strengthen the country’s transport infrastructure.”
Dr Nchemba added that the construction of the second phase of the SGR project is crucial in facilitating transportation within the country and enhancing diplomatic relations between Tanzania and the neighbouring countries of the Democratic Republic of the Congo and Burundi.
The Resident Manager of the African Development Bank, Dr Patricia Laverley, stated that economically connecting African countries is one of the strategic priorities of the Bank, and it is their pride to be part of the infrastructure project that will connect Tanzania, Burundi, and the Democratic Republic of the Congo.
“Also, these parts of the second phase of the SGR construction will use electric energy, which will help reduce carbon emissions, something we are very proud of,” added Dr Laverley.
This contract is the AfDB’s first financing in railway construction projects, where the bank has been a major development partner in the country by funding various water, road construction, and agriculture projects.
The Minister of Transport, Prof. Makame Mbarawa, thanked the African Development Bank for the funding and stated that this step is the result of the efforts of the President of the United Republic of Tanzania, Dr Samia Suluhu Hassan, who led sessions to seek funds for the construction of the SGR.
The Director-General of TRC, Masanja Kadogosa, stated that while the financing agreement for the second phase of the project is being signed, preparations for the commencement of the SGR operation between Dar Es Salaam and Dodoma are progressing well and that work on other parts of the first phase is continuing.
