The Government of Uganda is fast-tracking efforts to secure the final financing for the Malaba–Kampala Standard Gauge Railway (SGR), valued at €2.7 billion (approximately Shs 13.5 trillion).
High-level discussions with the Islamic Development Bank (IsDB) are seen as a critical step toward “financial closure,” which would trigger full-scale construction of the 273-kilometer Eastern Route.
The Minister of State for Works and Transport, Musa Ecweru, hosted an IsDB Appraisal Mission led by Dr. Issahaq Umar Iddrisu, Regional Hub Manager.
Discussions focused on integrating the SGR into a broader Shs 3.9 trillion ($800 million) Country Engagement Framework being finalised by IsDB with Uganda for 2025–2027.
“This railway is transformative for Uganda and the wider region… time is of the essence; we should close financing early and proceed without delay,” Ecweru told the delegation.
The SGR is a strategic effort to replace Uganda’s century-old Metre Gauge Railway (MGR). Between 2015 and 2023, Uganda partnered with China Harbour Engineering Company (CHEC), but Chinese lenders withdrew due to concerns over connectivity with Kenya’s SGR.
In October 2024, Uganda signed an Engineering, Procurement, and Construction (EPC) contract with Turkish firm Yapı Merkezi, drawing on the company’s experience with Tanzania’s SGR.
Subsequently, Uganda sought diversified financing from European export credit agencies and Islamic finance institutions, including IsDB, to fill the multibillion-euro funding gap.
The railway is designed for electric traction, supporting speeds of up to 120 km/h for passengers and 100 km/h for freight.
It will carry up to 25 million tonnes of cargo annually, with 40% of the contract value reserved for Ugandan firms.
Currently, transporting a 40-foot container from Mombasa to Kampala costs about Shs 14.6 million ($3,500) by road.
Once operational, the SGR is expected to reduce this to Shs 6.3 million ($1,500) while cutting transit times from several days to under 24 hours.
Each train will carry 216 containers—the equivalent of 200 trucks—significantly lowering road maintenance costs and carbon emissions.
Over 60 percent of the railway’s right-of-way has been acquired, with nearly 150 kilometers of land secured across Tororo, Butaleja, Namutumba, Luuka, Iganga, Mayuge, Jinja, and Buikwe districts.
Current efforts focus on the densely populated corridors of Mukono, Wakiso, and Kampala. The government has already invested more than Shs328 billion in compensation and early works to de-risk the project for international lenders.
The Malaba–Kampala line is a cornerstone of the Northern Corridor Integration Projects, linking Uganda to Kenya’s SGR and connecting the Great Lakes region—including Rwanda, South Sudan, and the DRC—to the Indian Ocean.
Bilateral talks with Kenya aim to ensure interoperability between Uganda’s European-standard line and Kenya’s Chinese-built tracks, supporting seamless “port-to-door” rail service.
Under a “Limited Notice to Proceed,” Yapı Merkezi is already setting up sleeper factories and construction camps along the route, preparing for full-scale construction once financing is finalised.