Tanzania secures 3.34tri/- SGR financing deal

DODOMA: THE government has signed a 1.277 billion US dollar (about 3.34tri/-) financing facility for the execution of Lots 3 and 4 of the Standard Gauge Railway (SGR) project, marking another milestone as Tanzania aspires to become a regional transport and logistics hub.

With the deal involving institutions from Sweden, Italy and Poland, Tanzania will be able to execute Lot 3 linking Makutupora and Tabora and Lot 4 connecting Tabora and Isaka, before the line is extended to neighbouring East African countries, including the Democratic Republic of the Congo (DRC) and Burundi.

Speaking in Dodoma yesterday during the signing, Minister for Transport Professor Makame Mbarawa said the milestone represents another decisive step in the progressive implementation of one of Tanzania’s most strategic infrastructure investments, aimed at enhancing regional economic integration.

Prof Mbarawa said that since the commencement of SGR development, more than 2,100 kilometres of railway are currently under construction out of a planned 4,752 kilometres. Feasibility studies have been completed across three key corridors: Central, Northern and Southern.

He said Tanzania has already achieved significant operational milestones, noting that the Dar es Salaam–Dodoma section is operational, having transported nearly six million passengers and approximately 120,000 tonnes of cargo to date.

“These operations have generated substantial economic benefits, including increased revenue, a reduction in fuel consumption by approximately 17 million litres, and a cut in carbon emissions by over 50 per cent, largely due to the shift from road to electrified rail transport.

These outcomes clearly demonstrate that modern railway infrastructure is both economically viable and environmentally sustainable,” he said.

On his part, Minister for Finance Ambassador Khamis Mussa Omar said the project will unlock vast opportunities in various sectors, including logistics and tourism, stressing that the SGR is not merely a railway but a major development driver and a means of efficient transportation.

“SGR is not only for Tanzania but for the entire region. This integration will stimulate broader economic growth,” he said.

Amb Khamis noted that there are plans to link the SGR from Mwanza to neighbouring countries such as Uganda, a move expected to stimulate economic activities along the Central Corridor.

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He added that Tanzania, in collaboration with the World Bank, is currently mapping potential economic opportunities along areas where the SGR passes, emphasising that the project goes beyond transport.

“We want to identify opportunities arising from the project, which cuts across 12 regions, almost half of the country. This presents opportunities to boost sectors such as agriculture and mining,” he said.

Sweden’s Ambassador to Tanzania, Charlotta Ozaki Macias, said Swedish companies and those based in Sweden have already secured contracts worth more than 428.4bn/- , particularly in signalling systems and advanced railway technologies.

According to the envoy, as the project progresses, total procurement linked to Sweden is expected to reach up to 2.8tri/- (SEK 10 billion).

“This deal demonstrates how Sweden and Tanzania are working together in new ways. Sweden’s engagement in the SGR reflects the ‘Team Sweden’ approach, where public institutions, financial institutions and the private sector collaborate in a complementary manner. Several Swedish entities have contributed in different but mutually reinforcing roles,” she said.

She added that the electric railway contributes to more sustainable transport, noting that shifting freight from road to rail will reduce emissions, ease congestion and improve road safety.

“These are important outcomes for both economic development and climate responsibility,” she said.

The SGR project is a major government initiative aimed at modernising the country’s rail network by replacing the outdated metre-gauge system.

The railway is designed to support heavy loads and high-speed travel, with electric locomotives capable of reaching speeds of up to 160 kilometres per hour.

Upon completion, the SGR will connect the port of Dar es Salaam on the Indian Ocean to Mwanza on Lake Victoria, with extensions to neighbouring countries such as Rwanda, Burundi and the DRC.