Tanzania has secured a $1.2 billion (KSh155b) commercial financing facility to build the Lot 6 Standard Gauge Railway from Tabora to Kigoma.
The African Development Bank (AfDB) arranged the facility, providing $800 million under a Partial Credit Guarantee, while the remaining amount was raised from other financiers.
AfDB said a nine-bank syndicate, co-arranged by Deutsche Bank and Société Générale, committed $720 million of guaranteed lending and $480 million of clean-risk sovereign lending.
The commercial tranche is part of an overall $2.3 billion financing package that also includes an Export Credit Agency tranche and a further tranche to be mobilised with a co-guarantor under the Bank’s broader mobilisation mandate.
The funding will support construction of the 411-kilometre electrified Tabora–Kigoma line, known as Lot 6, a strategic link in Tanzania’s railway network.
Max Ndiaye, Senior Director of the African Development Bank Group, said that combining development finance, commercial lending and insurance capacity unlocked the scale of financing required for transformational regional infrastructure and reflected the vision of the New African Financial Architecture for Development, which focuses on private capital mobilisation and risk-sharing partnerships.
Mike Salawou, Director of AfDB’s Infrastructure and Urban Development Department, said the railway’s strategic value lies in unlocking productive investment along the Central Corridor, connecting agricultural and mineral production areas, industrial centres and markets, strengthening regional value chains, creating jobs and deepening regional integration.
Tanzania has mandated the Bank to structure and mobilise up to $3.2 billion for its regional railway development through the Standard Gauge Railway Project.
