Tanzania Secures Funding for Standard Gauge Railway Link to Burundi

Tanzania’s government has secured funding for a Standard Gauge Railway (SGR) section linking Tanzania and Burundi, facilitated by Standard Chartered, Sinosure, and the Africa Development Bank. The railway line will connect Dar es Salaam to Mwanza, with further extensions underway. Currently operational sections and ongoing constructions show promising completion rates. The project aims to enhance freight services, which are expected to significantly increase revenue, reinforcing the importance of this infrastructure to regional integration and economic growth.

The government of Tanzania has announced that it has successfully secured financing for the construction of a vital section of the Standard Gauge Railway (SGR) that will link Tanzania with Burundi. Overseeing the endeavor, Tanzania Railways Corporation (TRC) is committed to completing a 2,561-kilometer railway line connecting the Indian Ocean port of Dar es Salaam to Mwanza, and ultimately extending to other neighboring countries including Burundi, the Democratic Republic of the Congo, Rwanda, and Uganda. Currently, train operations are running on the section from Dar es Salaam to Dodoma, while other sections are actively under construction. Mateshi Tito, the acting Director General of TRC, disclosed that negotiations have concluded with three prominent international financial institutions, which include Standard Chartered, China Export and Credit Insurance Corporation (Sinosure), and the Africa Development Bank (AfDB). These financial partners will facilitate the development of the railway segment from Uvinza in Kigoma, Tanzania, to Musongati in Burundi. While details regarding the specific funding amounts remain undisclosed, Mr. Tito affirmed that the signing of contracts is imminent to commence construction. Tito further noted the progress of various construction phases, revealing that the Makutupora-Tabora section is approximately 14.53 percent complete as of October, while the Tabora-Isaka segment stands at 6.14 percent completion. Noteworthy progress has been observed in the Isaka-Mwanza section, which has reached 60.62 percent completion, contrasted with the minimal advancement of 6.68 percent in the Tabora-Kigoma section. Further investments are being sought for the SGR project, particularly targeting locomotive procurement and the construction of the Mtwara-Mbamba Bay line. Augustine Vuma Holle, Chairman of the parliamentary Public Investment Committee (PIC), remarked that the government has thus far invested around $10 billion into the SGR project. He expressed optimism regarding the potential revenue increase from freight services, which are anticipated to surpass the current collection of over Tsh 20 billion ($7.5 million) since the initiation of passenger operations. Deputy Minister for Transport David Kihenzile conveyed satisfaction with the PIC’s feedback and underscored the government’s commitment to diligently executing the extensive SGR project. He emphasized the dual nature of the railway, indicating that freight transportation typically generates a significantly larger portion of revenue compared to passenger services, with expectations of enhanced financial returns once freight operations commence.

The Standard Gauge Railway (SGR) project is an ambitious initiative that aims to connect various East African countries through a modern rail network, enhancing trade and transport efficiency in the region. Tanzania’s government has prioritized the development of this railway line as part of its broader infrastructure strategy, which is pivotal for fostering economic growth and regional connectivity. The project not only facilitates passenger transport but is also designed to optimize freight services, a major revenue source for the railways. The financial backing from international institutions reflects global confidence in the economic potential of East Africa.

In summary, the Tanzanian government is making significant strides in securing the necessary funding for the SGR extension to Burundi, showcasing the commitment to enhancing regional connectivity. With ongoing construction and plans for further investments, the project is expected to boost the economy through increased revenue from freight services. The involvement of respected financial institutions further solidifies the project’s financial viability, projecting optimism for its future contributions to the Tanzanian economy and the wider East African region.

Original Source: www.theeastafrican.co.ke