Editor’s Note: This article was originally published by THE GUARDIAN
THE government has signed a financing agreement for $1.277bn for construction of the standard gauge railway (SGR) fourth slot from Makutupora to Isaka.
Dr Natu El-Maamry Mwamba, the Treasury permanent secretary, signed the pact with Herman Kasekende, the Standard Chartered Bank chief executive officer, where she said the agreement marks a milestone in the country’s infrastructure development agenda.
Khamis Mussa Omar, the minister, said the funds are part of a broader $2.33bn financing package for the strategic project, with the contract covering the construction of the Makutupora to Isaka (368 km) and Tabora to Isaka (165 km), bringing the total length under this phase to 533 kilometers.
The funding was secured through international cooperation involving export credit agencies in Italy (SACE), Sweden (EKN) and Poland (KUKE), coordinated by the issuing bank.
“This project is the backbone of Tanzania’s economic transformation, set to connect the port of Dar es Salaam with the Lake Zone and neighbouring countries, positioning Tanzania as a regional trade and transport hub in East and Central Africa,” he said.
Transport minister Prof. Makame Mbarawa noted that once completed, the railway section facility will enhance cargo capacity by to up to 5m tonnes annually while significantly reducing transport time and costs.
SGR service from Dar es Salaam and Dodoma is recording strong performance, carrying nearly 6m passengers and more than 120,000 tonnes of cargo.
“The project has reduced travel time from 12 hours to just three hours, cut fuel consumption by over 17m litres and reduced carbon emissions by more than 50 percent,” he said.
Lena Bertilsson, head of large corporates at the Swedish Export Credit Agency (EKN), said the linked export creditors were satisfied with the progress of the SGR project, with the credit link boosting ties with Tanzania.
Achievements recorded so far have opened the door for further investment, while Sweden and other credit guarantors expect to lend support for major development projects that meet international standards and environmental sustainability, she stated.
The extension of the railway to Isaka is expected to unlock new trade opportunities for neighboring countries, reduce logistics costs and strengthen the competitiveness of Tanzanian goods in regional and global markets.
The SGR project remains one of Tanzania’s flagship infrastructure initiatives, aimed at driving long-term economic growth, creating employment and reinforcing the country’s strategic position as a regional transport and trade hub.
Once completed, the SGR network is expected to span up to 2,100 kilometers, significantly transforming Tanzania’s logistics and transport capacity.
The credit guarantee pact is a milestone as the railway will unlock new business opportunities, boost regional trade, and improve connectivity between inland regions and international mark, the minister added.
