AfDB Grants $696 Million for SGR Rail Development in Tanzania and Burundi

The African Development Bank Group (AfDB) has approved a funding package of USD 696.41 million for Burundi and Tanzania to advance Phase II of the Joint Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project.

The project encompasses the construction of 651 kilometers of rail infrastructure aimed at enhancing cross-border travel and regional integration.

The financing includes USD 98.62 million in grants for Burundi and USD 597.79 million in loans and guarantees for Tanzania, and it will facilitate the development of a single electrified standard gauge track divided into three segments: Tabora – Kigoma (411 km) and Uvinza – Malagarasi (156 km) sections in Tanzania; and the Malagarasi –Musongati section (84 km) in Burundi.

This rail line will be integrated with Tanzania’s existing railway network, providing access to the port of Dar es Salaam and building upon the 400 kilometers of rail already constructed from Dar es Salaam to Dodoma, with further construction underway to Tabora.

The project aims to transform the Central Transport Corridor into an economic zone by enhancing trade and manufacturing opportunities and reducing dependency on road trucking, which is associated with high accident rates and maintenance costs.

The SGR network will connect key economic zones, industrial parks, Inland Container Depots, and population centers along the corridor, thus promoting economic activities and resilience through the creation and development of institutions managing the new railway sector and supporting capacity building through skills training in both countries.

The construction aligns with strategic initiatives like the East African Community Rail Master Plan and the African Union’s Program for Infrastructure Development in Africa (PIDA), aiming to drive economic and social transformation in the region.

Moreover, it will enable Burundi to intensify the exploitation of its significant nickel deposits in the Musongati mining fields and other resources such as lithium and cobalt, boosting its trade through the Dar es Salaam port, which accounts for 80% of the country’s import and export trade.

This initiative resonates with the AfDB’s Ten-Year Strategy and operational priorities of “Integrate Africa” and “Industrialize Africa”, and is in line with the Regional Integration Strategy Paper for East Africa (2023-2027) and the Country Strategy Papers for Tanzania (2021-2025) and Burundi (2019-2023).

Tanzania SGR

The government of Tanzania is currently expanding the country’s rail network with the construction of a Standard Gauge Railway (SGR) to replace the old, inefficient meter-gauge railway system.

The SGR will link Tanzania, from the port of Dar es Salaam on the Indian Ocean to the port of Mwanza on the shore of Lake Victoria in northern Tanzania, and from there to neighboring countries of Rwanda, Burundi, and the Democratic Republic of the Congo (DRC).