Uganda’s Standard Gauge Railway (SGR) project is entering a critical implementation stage following the securing of fresh funding that lays the foundation for its timely completion. According to National Coordinator Perez Wambulu, the government has already allocated €75 million to kick-start preliminary works while broader financing arrangements are finalized.
The first phase of the SGR will stretch 272 kilometers from Malaba on the Kenyan border to Kampala, Uganda’s capital, at an estimated cost of $2.7 billion. This segment is considered vital for improving the country’s transport efficiency, cutting travel times, and strengthening regional trade links by integrating Uganda into the wider East African railway network. By shifting cargo movement from roads to rail, the project is also expected to reduce road congestion and lower transport costs.
Accountability
The financing plan has been carefully structured to ensure affordability and transparency. Uganda will directly contribute 15% of the cost, while 60% will be sourced from Export Credit Agencies (ECAs) offering low-interest loans for large infrastructure projects. An additional 25% will come from Development Finance Institutions (DFIs), including the African Development Bank, the Islamic Development Bank, and the OPEC Fund for Development. Notably, the Islamic Development Bank has already pledged €400 million.
Wambulu emphasized that lessons had been drawn from regional experiences, particularly Tanzania’s railway financing model, to minimize the risk of funding delays. The government’s approach, he noted, ensures predictability and shields the project from financial uncertainty.
Turkish firm Yapi Merkezi has been selected as the contractor for the first phase, following due diligence on its capacity to deliver the railway within schedule. While questions have been raised about the firm’s readiness, project leaders remain confident that the company will meet expectations. Once completed, the SGR is set to transform Uganda’s transport landscape and strengthen its role in regional trade.