DODOMA, November 9, 2026 – Tanzania has signed a US$ 1.2 billion commercial financing facility for the construction of the Tabora–Kigoma section of its Standard Gauge Railway [SGR], marking a major milestone in the country’s railway development programme.
The African Development Bank [AfDB], which acted as the Initial Mandated Lead Arranger [MLA], structured and arranged a Partial Credit Guarantee [PCG] of US$ 800 million, the largest of its kind issued by the Bank to date.
Tanzania had mandated the AfDB to structure and mobilise up to US$ 3.2bln for its regional railway development programme. The financing strategy was designed to attract capital from different classes of investors while balancing their risk appetites, managing the country’s debt obligations and navigating geopolitical developments that have influenced interest rates.
The transaction combines the Bank’s expertise in transport infrastructure with its financial structuring and guarantee capabilities to advance the development of the Central Corridor as a regional economic and trade route.
The AfDB mobilised a nine-bank syndicate for the US$ 1.2bln commercial facility, co-arranged by Deutsche Bank and Société Générale.
Other participating lenders are HSBC, Commerzbank, Nedbank, Stanbic Bank Tanzania, First Abu Dhabi Bank, FirstBank UK and Bank of Africa United Kingdom.
Their commitments comprise US$ 720 mln in guaranteed lending and US$ 480mln in lending extended on an unsecured basis to the Tanzanian Government.
The signed US$ 1.2bln facility forms part of a broader US$ 2.3bln financing package, which also includes an export credit agency [ECA] tranche and another tranche to be mobilised in collaboration with a co-guarantor, under the Bank’s wider financing mandate.
At the centre of the commercial financing package is an AfDB Partial Credit Guarantee of up to US$800MLn, covering the principal of the guaranteed tranche and two years of interest.
Although the AfDB remains the Guarantor of Record, credit insurance arranged by insurance broker Texel distributes US$ 405.5mln of the exposure among a panel of international insurers, including Lloyd’s syndicates.
The arrangement is expected to increase private-sector participation in the transaction by spreading risk among international insurers and strengthening the guarantee structure, thereby enabling Tanzania to secure more commercial financing for its railway development.
The financing will support the construction of the 411-kilometre electrified Tabora–Kigoma railway line, designated Lot 6, which is a strategic link in Tanzania’s national railway network.
The project is expected to stimulate economic development in western Tanzania by providing a high-capacity, long-distance transport link for production and trade.
Farmers, mining operators and communities are expected to benefit from more efficient transport, reduced transportation costs and employment opportunities during the construction and operation of the railway.
Once connected to Tanzania’s wider railway network and the Port of Dar es Salaam, the line will also facilitate trade with the Democratic Republic of Congo [DRC] across Lake Tanganyika through the ports of Kigoma and Kalemie.
The wider regional railway programme is also expected to strengthen transport links with Burundi and extend connectivity further into eastern DRC.
“By combining development finance, commercial lending and insurance capacity, we have successfully unlocked the scale of financing required to deliver this type of transformational regional infrastructure,” said Max Ndiaye, Senior Director at the African Development Bank Group.
He said the transaction reflected the vision behind the New African Financial Architecture for Development [NAFAD], which focuses on mobilising private capital and strengthening risk-sharing partnerships to raise resources at scale.
Mike Salawou, Director of the AfDB’s Infrastructure and Urban Development Department, said the railway’s strategic importance lay in its potential to stimulate productive investments along the Central Corridor.
“By connecting agricultural and mineral production areas, industrial centres and markets, the investment can strengthen regional value chains and expand opportunities for businesses and communities,” Salawou said.
He added that the Bank intended to translate the landmark financing into a transport corridor that supports competitive industries, creates jobs and deepens regional integration.
The transaction contributes to the implementation of the AfDB Group’s Ten-Year Strategy 2024–2033 and its Four Cardinal Points, particularly efforts to unlock Africa’s capital, develop resilient infrastructure and strengthen competitive value chains.
Through the mobilisation of commercial financing for a regional transport corridor, the Bank seeks to promote trade, industrial development and regional integration while expanding sustainable economic opportunities across the continent.
https://thecooperator.news/isdb-approves-e650-75mln-financing-for-ugandas-sgr/
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