Tanzania’s SGR connecting with Burundi, DR Congo gets Sh230 billion AfDB funding
Finance minister Dr Mwigulu Nchemba (right) signs financing agreement with AfDB's country manager for Tanzania, Dr Patricia Laverley, in Dar es Salaam on February 23, 2024.
PHOTO | FINANCE MINISTRY
What you need to know:
- The project is part of the Standard Gauge Railway (SGR) which stretches from the port of Dar es Salaam to connect Tanzania with the neighbouring countries through the central corridor of transportation.
Dar es Salaam. Tanzanian government has, on Friday 23 February, 2024, signed a Sh231.3 billion ($91.76 million) financing agreement with the African Development Bank (AfDB) to start the construction of a modern railway that seeks to connect it with the neighbouring countries, Burundi and Democratic Republic of Congo (DRC).
The project is part of the Standard Gauge Railway (SGR) which stretches from the port of Dar es Salaam to connect Tanzania with the neighbouring countries through the central corridor of transportation.
The concessional loan targets to finance construction of sections six and seven of the modern railway, from Tabora to Kigoma and from Uvinza to Malagarasi.
According to Dr Mwigulu Nchemba, the Minister for Finance, the construction of the 567 kilometres will be implemented in the space of seven years, starting from2024 to 2031.
“The goal of this project is to connect Tanzania with Burundi through a modern railway from Malagarasi to Musongati and in the future, connect with DRC from Malagarasi,” said Dr Nchemba during the signing ceremony.
The section is part of the “Multinational Tanzania/Burundi/DR Congo joint standard gauge railway project” which seeks to connect the three countries through modern railway.
“The contract we have signed today, will strengthen rail transport and improve regional integration and commercial relations between our country and our neighbours in Burundi and the DRC,” he said.
Dr Nchemba said Burundi has business opportunities that include the presence of nickel of approximately 250 million tonnes but challenges of transportation to the port of Dar es Salaam prevent the opportunity from developing the economy of both countries.
During the event held at the Ministry of Finance in Dar es Salaam, AfDB also agreed to extend Sh166.4 billion ($66 million) to the Tanzania Agricultural Development Bank (TADB) to enhance capital of the bank which finances agriculture.
The loan aims to enable people to access loans for agricultural activities, increase production and strengthen food security in the country.
“We expect TADB to increase access to loans for youth groups through the 'Building a Better Tomorrow (BBT)' programme which was implemented by the government,” said Dr Nchemba.
The Minister for Transport, Prof Makame Mbarawa applauded the AfDB for extending its concessional loan to develop infrastructure.
“This is a historical moment for us to receive funds from the AfDB because it usually offers loans for agriculture, water and other related sectors. The funds we have just received will play a vital role in connecting Tanzania with the neighbouring countries,” he said.
Commenting on the agriculture financing agreement, AfDB country manager for Tanzania, Ms Patricia Laverly said the bank understands that TADB is an important institution in agricultural financing and requires enhanced capitalisation to offer more competitive and better structured financing options to farmers.
“This financing is a loan to Tanzania, as an equity investment in TADB. This loan will support the entire agricultural value chain, with a special focus on women-led businesses, by providing lending services at more affordable rates and extended tenors,” she said.
She said the bank was also exploring opportunities to support TADB through its Affirmative Finance Action for Women in Africa (AFAWA) initiative to carry out a gender diagnostics assessment, support product development, and gender mainstreaming training.
