Uganda has secured a landmark financing package worth €650.75 million (approximately Shs2.6 trillion) from the Islamic Development Bank (IsDB) to support the development of the country’s Standard Gauge Railway (SGR), in what has been described as the largest single-project financing approval by the bank for Uganda.
The financing was approved during the 51st Islamic Development Bank Group Board of Governors’ Annual Meetings held in Baku, Azerbaijan, from June 16 to 19, 2026, under the theme “Regional Integration for Sustainable Prosperity.”
The Permanent Secretary and Secretary to the Treasury (PSST), Dr Ramathan Ggoobi, who served as Uganda’s Temporary Governor to the IsDB, led the Ugandan delegation at the meetings.
Ggoobi said the government remains committed to achieving financial closure for the SGR project by November 2026, describing the railway as a key infrastructure investment expected to transform Uganda’s transport and logistics sector.
The IsDB financing will support major components of the SGR corridor, including construction of the 553-metre Jinja Nile Bridge, the 2.12-kilometre Mbuya–Kampala Tunnel, six railway stations in Tororo, Iganga, Jinja, Lugazi, Kampala East and Kampala City, as well as three railway workshops in Kampala East, Jinja and Tororo.
Government says the investment will improve connectivity, lower transport and logistics costs, enhance regional trade, and strengthen Uganda’s position as a key trade hub within East Africa.
By the end of May 2026, Uganda and the IsDB had signed eight public sector financing agreements comprising loans and grants valued at USD 896.55 million (approximately Shs3.3 trillion).
The largest share of the portfolio is under the Integrated Transport Infrastructure Services Programme, which accounts for projects worth about USD 721 million (approximately Shs2.7 trillion).
Other IsDB-supported projects in Uganda include Technical and Vocational Education and Training (TVET) programmes, the upgrading of the Muyembe–Nakapiripirit Road, the Rwenkunye–Apac–Lira–Acholibur Road, and irrigation schemes in Unyama, Namalu and Sippi.
The bank is also supporting several road projects, including the upgrading of the Katine–Ochero Road, access roads in Kaberamaido and Kalaki, construction of the Masindi Port Bridge, and road improvements in Kyenjojo, Kihura, Bwizi, Rwamwanja, Kahunge and Mpara.
Additional projects financed by the IsDB include the upgrading of the Kumi–Ngora–Serere–Kagwara Road and establishment of regional oncology centres in Arua and Mbale.
Speaking during the Governors’ Roundtable, Dr Ggoobi welcomed the launch of the IsDB Concessional Fund (ICF), which aims to increase concessional financing to about 15 percent of the bank’s annual approvals.
He said the initiative comes at a critical time when traditional foreign aid flows are declining, creating financing challenges for developing countries.
“Given the changes in the global financial architecture, there is a need for multilateral development finance institutions such as the IsDB to reform and become more inclusive, adaptive and responsive to the needs of their member countries,” Ggoobi said.
The approval of the SGR financing package marks a significant milestone in Uganda’s partnership with the Islamic Development Bank and the country’s efforts to modernise transport infrastructure and accelerate economic growth.