AfDB to finance Tanzania’s standard gauge railway
Thursday August 10 2017
A standard gauge railway overpass under construction at Taru next to the Nairobi-Mombasa Highway. The Tanzania's line would run from Dar es Salaam to Musongati in south-western Burundi. PHOTO | FILE
The African Development Bank has agreed to finance Tanzania’s central railway projects after several stakeholders pulled out.
Speaking in Dar es Salaam last week, the bank’s East African managing director Nyamajeje Weggoro said AfDB is satisfied with the undertakings of the government, and will discuss the proposal on how much the bank will allocate for construction of the standard gauge railway.
The total cost of the railway would be$7.6 billion for a distance of 2,190 kilometres from Dar es Salaam to the Burundi border. It will link Tanzania with landlocked neighbours Burundi, Rwanda, Uganda and the Democratic Republic of Congo.
The line would run from Dar es Salaam to Musongati in south-western Burundi.
“The standard gauge railway line is very important for the region. It will improve regional trade links and help to boost the economies of Tanzania and its landlocked neighbours Uganda, Rwanda, Burundi and the DRC,” Dr Weggoro said.
It is not clear the amount AfDB will give to the project.
READ: Tanzania struggles to finance SGR
Soft loans
In May, President John Magufuli asked his South African counterpart Jacob Zuma to help the country secure soft loans from Brics Development Bank. Brics comprises Brazil, Russia, India, China and South Africa as an association of emerging economies.
“I have asked President Jacob Zuma to help us secure a low interest loan for us from Brics to finance the SGR project,” President Magufuli said during President Zuma’s tour in Dar es Salaam.
Before that, the Chinese Exim Bank had pledged to lend Tanzania $7.6 for the construction.
However, the deal is currently in limbo after a Chinese company previously awarded the contract to build the railway by the previous regime had its contract suspended by President Magufuli over allegations of irregularities in the tendering process.
READ: Uganda, Tanzania to go electric in railway line project
First phase
Construction of the first phase of the project that runs from Dar es Salaam to Morogoro is fully funded by the government.
The first phase involves construction of a dry port project and six stations, at a cost of $1.2 billion for 300 kilometres of railway, and is expected to be completed by 2019.
President Magufuli also asked the World Bank Group president Dr Jim Yong Kim who visited Tanzania in March for money to finance the project. The World Bank has already set aside $200 million for the rehabilitation of the central railway.