The Bank's support will enable 651 kilometers of rail to be laid between Tanzania and Burundi, promoting cross border travel and regional integration

AfDB Approves $696mln Finance for Burundi-Tanzania Railway Project

The Board of Directors of the African Development Bank (AfDB) Group has approved various financing structures valued at $696.41 million for the Burundi-Tanzania railway construction project.

The finance aims to start Phase II of the Joint Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project.

The bank says the financing is intended to construct 651 kilometers on the Tanzania-Burundi railway line which will consist of the development of a single electrified standard gauge track.

This standard gauge railway project will be connected to the existing railway network of Tanzania, providing access to the port of Dar es Salaam.

In total, 400 kilometers of rail infrastructure has already been built in Tanzania from Dar es Salaam to Dodoma since the start of the first phase of the project. The rest of the section from Dodoma to Tabora is under construction.

The Bank Group will provide $98.62 million to Burundi in the form of grants and $597.79 million to Tanzania in the form of loans and guarantees.

As the Initial Mandate Lead Arranger (IMLA), the Bank says it will structure and mobilize financing of up to $3.2 billion from commercial banks, Development Financial Institutions (DFIs), Export Credit Agencies (ECAs) and institutional investors

The total cost of the project both in Tanzania and Burundi is estimated at nearly $3.93 billion.

“Access to an efficient cost-effective long-haul bulk transport service through the SGR will incentivize large-scale mining and commercial agriculture,” AfDB says.

“It will transform the Central Transport Corridor to an economic corridor by enhancing trade and manufacturing opportunities along the corridor influence zone.”

The project is marked as a priority for not only the East African Community (EAC) Rail Master Plan, but also the African Union’s Program for Infrastructure Development in Africa (PIDA). The AfDB says it will facilitate economic and social transformation in both countries and in the region.