Tanzania Gauge rail project secures ECA and DFI backing
Tanzania has signed a facility agreement with Standard Chartered for a $1.46 billion ECA-backed term loan to fund construction of the Standard Gauge Railway (SGR) project from Dar es Salaam to Makutupora.
Standard Chartered Tanzania is global coordinator, bookrunner and mandated lead arranger for the deal, which will be the largest foreign currency financing raised by the country's Ministry of Finance to date. The biggest component will come from EKF and EKN with SEK.
EKF is reinsuring its risk with NEXI, CESCE, OeKB, SACE and SERV. African Export-Import Bank (Afreximbank), Development Bank of Southern Africa (DBSA) and the Eastern and Southern African Trade and Development Bank (TDB) are also participating as lenders.
The SGR project was – prior to January 2017 – to be financed by $7.6 billion loan from China’s Exim Bank but funds were never dispersed. The project, which is approximately 550km long, connecting Dodoma to Dar es Salaam via Morogoro and Makutupora. It will also connect Tanzania to Burundi, Rwanda and The Democratic Republic of Congo.
Minister of Finance and Planning, Dr Philip Mpango, said the funding would allow the project to be completed in time. The Tanzania Railways Corporation said the railway will address current congestion and decrease freight service charges by 40%.
