THE African Development Bank (AfDB) has greenlit a significant financial injection of $696.41 million for the commencement of Phase II of the Joint Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project. This ambitious initiative aims to construct 651 kilometres of railway infrastructure in Burundi and Tanzania.
The approved funding will support the development of a single electrified standard gauge track, divided into three sections: Tabora – Kigoma (411 km) and Uvinza – Malagarasi (156 km) in Tanzania, along with the Malagarasi – Musongati section (84 km) in Burundi. This railway project will seamlessly connect with Tanzania’s existing railway network, providing crucial access to the port of Dar es Salaam. Notably, 400 kilometres of rail infrastructure have already been completed in Tanzania from Dar es Salaam to Dodoma during the first phase of the project, with the Dodoma to Tabora section currently under construction.
Burundi is set to receive $98.62 million in grants, while Tanzania will benefit from $597.79 million in loans and guarantees from the AfDB. As the Initial Mandate Lead Arranger (IMLA), the Bank will mobilise financing of up to $3.2bn from various sources, including commercial banks, Development Financial Institutions (DFIs), Export Credit Agencies (ECAs), and institutional investors. The overall estimated cost of the project in both Tanzania and Burundi is nearly $3.93bn.
The Standard Gauge Railway (SGR) project is expected to revolutionise transportation, incentivising large-scale mining and commercial agriculture by providing an efficient and cost-effective long-haul bulk transport service. The rail network will transform the Central Transport Corridor into an economic corridor, fostering trade and manufacturing opportunities and reducing the reliance on road trucking transportation.
The SGR will unlock and connect vital economic processing zones, industrial parks, Inland Container Depots (ICDs), and population centres along the central corridor, promoting accessibility and economic activities. Moreover, the project will contribute to building resilience by establishing and developing institutions to manage the new railway sector in Burundi and supporting capacity building through skills training in both countries.
This project aligns with the East African Community (EAC) Rail Master Plan and the African Union’s Programme for Infrastructure Development in Africa (PIDA), reflecting its priority status in the region. It is also in line with the African Development Bank’s Ten-Year Strategy, ‘High 5’ operational priorities, namely ‘Integrate Africa’ and ‘Industrialise Africa,’ as well as the Regional Integration Strategy Paper for East Africa (2023-2027) and the Country Strategy Papers for Tanzania (2021-2025) and Burundi (2019-2023).
The construction of the railway is poised to unlock economic potential in Burundi, allowing for intensified exploitation of valuable resources such as nickel, lithium, and cobalt. These resources are expected to generate substantial revenue through the rail link with the port of Dar es Salaam, which currently handles 80 percent of Burundi’s import and export trade. This transformative project will add value to the national GDP, providing Burundi with additional resources to expedite its social and economic development.
