AfDB nods Sh106.8 billion financing for Burundi-Tanzania SGR
The African Development Bank (AfDB) has approved Kes106.8 billion ($696.41 million) in financing for the construction of a 650-kilometer railway in the Central Corridor network, spanning Burundi and Tanzania.
AfDB will provide $98.62 million in grants to Burundi and $597.79 million in loans and guarantees to Tanzania for the second phase of the Joint Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project. This funding will be allocated to the development of a single electrified standard gauge track covering 651 kilometers on the Tanzania-Burundi railway line.
The investment is divided into three segments: the 411 km Tabora–Kigoma stretch and the 156 km Uvinza–Malagarasi sections in Tanzania, and the 84 km Malagarasi–Musongati section in Burundi.
The SGR project will integrate with Tanzania’s existing railway network, providing access to the port of Dar es Salaam. Currently, 400 km of rail infrastructure has been completed in Tanzania, from Dar es Salaam to Dodoma, with the Dodoma to Tabora section currently under construction.
AfDB, acting as the Initial Mandate Lead Arranger (IMLA), will structure and mobilize up to $3.2 billion in financing from commercial banks, Development Financial Institutions (DFIs), Export Credit Agencies (ECAs), and institutional investors. The total project cost for both Tanzania and Burundi is estimated at nearly $3.93 billion.
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Shift from road trucking
The infrastructure investment aims to establish an efficient and cost-effective long-haul bulk transport service through the SGR corridor, encouraging large-scale mining and commercial agriculture. Additionally, it seeks to transform the Central Transport Corridor into an economic corridor, boosting trade and manufacturing opportunities along the corridor influence zone and promoting a shift from road trucking transportation.
The SGR railway network will unlock and connect key economic processing zones, industrial parks, Inland Container Depots (ICDs), and population centers, fostering economic activities. The project will contribute to building resilience by establishing and developing institutions to manage the new railway sector in Burundi and supporting capacity building through skills training in both countries.
This initiative is a priority not only for the East African Community (EAC) Rail Master Plan but also for the African Union’s Program for Infrastructure Development in Africa (PIDA). It is expected to facilitate economic and social transformation in both countries and the region.
The construction of this railway will enable Burundi to intensify the exploitation of nickel, as the country possesses the 10th largest deposit in the world in the Musongati mining fields. Additionally, Burundi holds resources such as lithium and cobalt, expected to generate significant revenue through the rail link with the port of Dar es Salaam, which currently handles 80 percent of the country’s import and export trade.
