Dar es Salaam. In a groundbreaking move to boost Africa’s infrastructure development, the African Development Bank (AfDB) has joined forces with Deutsche Bank and France’s Société Générale to spearhead a financing syndication strategy aimed at raising up to $1.2 billion for the ambitious Standard Gauge Railway (SGR) project in Tanzania.
The agreement was officially signed at the African Investment Forum’s 2024 Market Days in Rabat, Morocco, recently.
The multi-billion-dollar project, which promises to transform regional connectivity, involves the construction of a 411-kilometer railway line linking the inland city of Tabora to the port of Kigoma.
The Tanzanian government, through its Ministry of Finance, is seeking to tap into international debt capital markets to fund the project, which is valued at a total of $2.3 billion.
The SGR project is not just a railway line—it’s a game-changer for East Africa’s economic landscape.
The railway will connect Tanzania’s bustling port of Dar es Salaam on the Indian Ocean to the inland port of Mwanza on Lake Victoria, with plans to extend further into neighboring countries, including Rwanda, Burundi, the Democratic Republic of Congo (DRC), and Uganda.
This network will unlock vast economic opportunities, creating new trade and commodity corridors for mining, agriculture, and other critical sectors across the region.
The AfDB’s Senior Director for Syndications, Cofinancing, and the Africa Investment Forum, Mr Max Ndiaye, emphasised the strategic importance of the project.
“This collaboration marks a significant milestone not only for Tanzania but for Africa’s integrated economic future. The railway will act as a key artery in boosting intra-Africa trade, enhancing regional connectivity, and unlocking the continent’s vast economic potential,” he said.
The financing effort is being structured in two tranches, with the AfDB taking the lead in coordinating the second tranche.
The contributions will come from a diverse range of financial institutions, including development finance institutions (DFIs), Export Credit Agencies (ECAs), bilateral lenders, and multilateral development banks.
Deutsche Bank’s Managing Director for Africa, Myriam Ouazzani, and Randolph Fotso, Société Générale’s Head of DFI Solutions, Development and Structured Export Finance, also played pivotal roles in the agreement, underscoring the private sector’s commitment to Africa’s infrastructure and development agenda.
“We are excited to be part of this landmark project. The SGR will not only connect countries but will also spur job creation and promote regional economic integration,” said Ouazzani.
With East Africa’s infrastructure often seen as a bottleneck to growth, the SGR project stands out as a beacon of hope.
Once completed, it will ease the transportation of goods and commodities, reduce logistics costs, and strengthen the region’s position as a key player in global trade.
By linking the East African coast to some of its most resource-rich inland areas, the railway could revolutionise the flow of goods across the region, unlocking markets and driving economic diversification.
It also sets a compelling example for other African nations aiming to develop integrated transport solutions that support sustainable growth.
As this historic agreement unfolds, the SGR project stands poised to reshape the economic future of Tanzania and its neighbours, reinforcing the AfDB’s role as a catalyst for transformative change on the continent.
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Source: allafrica.com
