Tanzania signs $1.2B facility for new section of SGR

Tanzania has secured $1.2 billion in commercial financing for the construction of Lot 6 Standard Gauge Railway from Tabora to Kigoma. The funding was provided by the African Development Bank (AfDB) through a $800 million Partial Credit Guarantee (PCG) and the remainder raised from other investors. The bank's Senior Director Max Ndiaye explained that by merging development finance, commercial lending, and insurance capacity, they have unlocked the necessary scale of financing for such transformative infrastructure projects.

The AfDB mobilized a nine-bank syndicate, co-arranged by Deutsche Bank and Société Générale, with commitments of $720 million in guaranteed lending and $480 million in risk-based lending to the sovereign. This financing is part of a larger $2.3 billion package, which includes an ECA tranche and another tranche to be raised collaboratively with a co-guarantor.

The $411-kilometre electrified Tabora–Kigoma line, or Lot 6, is a crucial link in Tanzania's railway network. It connects productive areas, industrial centers, and markets, strengthening regional value chains and promoting economic growth. The bank's Director Mike Salawou emphasized the potential of this railway to boost regional integration and create jobs.

Tanzania had mandated the Bank to structure and mobilize up to $3.2 billion for its regional railway development through the Standard Gauge Railway Project.