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Tanzania gets Sh772bn loan for SGR linking it to Rwanda, Uganda

Tanzania has secured a $7.6 billion (Sh772 billion) loan from China’s Export-Import Bank to build a railway line that will link it to its neighbours, President John Magufuli’s office said on Wednesday.

Tanzania wants to profit from its long coastline and upgrade its rickety railways and roads to serve growing economies in the landlocked heart of Africa.

Magufuli’s office said in a statement that Exim had agreed to provide the concessional loan to finance construction of a major standard gauge railway line, which will start in this financial year.

The announcement follows talks between Magufuli and Exim Bank President Liu Liange in Tanzania’s administrative capital Dodoma on Wednesday.

“The planned standard gauge railway line will improve regional trade links and help to boost the economies of Tanzania and its landlocked neighbours including Uganda, Rwanda, Burundi and the Democratic Republic of the Congo (DRC),” the statement stated.

Natural gas discoveries in Tanzania and oil finds in Kenya and Uganda have turned East Africa into an exploration hotspot for oil firms, but transport infrastructure in those countries has suffered from decades of neglect and under-investment.

Tanzania said last year it had awarded contracts to Chinese firms to build new railway lines, expanding Beijing’s presence in East Africa’s second-biggest economy.

In 2014 it signed an agreement with China Merchant Holding International to build a mega port and economic zone at Bagamoyo that is expected to cost at least $10 billion.

Exim Bank is also financing a $1.2 billion (Sh122 billion), 532km (330 mile) natural gas pipeline in Tanzania. Tanzania’s Finance and Planning ministry in a separate statement on Wednesday said the country had secured a $200 million (Sh20,316 billion) loan from the African Development Bank to finance transport infrastructure projects.


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