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AfDB approves $696M for Tanzania-Burundi railway project

AfDB approves $696M for Tanzania-Burundi railway project

The African Development Bank Group has granted approval for the financing of Phase II of the Joint Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project. Valued at $696.41 million, the funding aims to construct 651 kilometers of railway connecting Tanzania and Burundi, fostering cross-border travel, and promoting regional integration.

Project Overview:

  1. Railway Development: The project involves the construction of a single electrified standard gauge track spanning 651 kilometers. It comprises three lots: Tabora – Kigoma (411 km) and Uvinza – Malagarasi (156 km) sections in Tanzania, and the Malagarasi – Musongati section (84 km) in Burundi.
  2. Funding Structure: The African Development Bank will provide $98.62 million to Burundi as grants and $597.79 million to Tanzania in the form of loans and guarantees. The Bank will also act as the Initial Mandate Lead Arranger, mobilizing up to $3.2 billion from commercial banks, Development Financial Institutions (DFIs), Export Credit Agencies (ECAs), and institutional investors.
  3. Economic Impact: The Standard Gauge Railway (SGR) aims to enhance long-haul bulk transport services, promoting large-scale mining and commercial agriculture. It is expected to transform the Central Transport Corridor into an economic corridor, reducing reliance on road trucking and improving trade and manufacturing opportunities.
  4. Connectivity and Accessibility: The SGR network will connect economic processing zones, industrial parks, Inland Container Depots (ICDs), and population centers along the central corridor, boosting accessibility and economic activities in the region.
  5. Resource Exploitation: The railway will enable Burundi to intensify the exploitation of its significant nickel deposit in the Musongati mining fields, along with other resources like lithium and cobalt. This, in turn, is anticipated to contribute to the country’s GDP and accelerate its social and economic development.
  6. Regional Integration: Aligned with the East African Community (EAC) Rail Master Plan and the African Union’s Program for Infrastructure Development in Africa (PIDA), the project is a priority for regional integration, fostering economic and social transformation.

The approval of $696 million in financing by the African Development Bank for the Tanzania-Burundi Railway Project marks a significant step toward enhancing regional connectivity, economic development, and resource exploitation. The project aligns with the Bank’s strategic goals and is poised to bring about transformative changes in Tanzania, Burundi, and the wider East African region.

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