The African Development Bank (AfDB) has signed a coordination agreement with Deutsche Bank and Société Générale to raise up to $1.2bn for the Standard Gauge Railway (SGR) project in Tanzania.

This agreement was signed at the 2024 African Investment Forum in Rabat, Morocco.

AfDB serves as the initial mandated lead global coordinator for the project’s financing.

The financing plan includes two tranches. AfDB will manage the second tranche, working with development finance institutions, Export Credit Agencies, bilateral lenders, and multilateral development banks.

Tanzania’s Ministry of Finance is actively pursuing international debt capital markets to fund the construction of the 411km railway line from Tabora to Kigoma.

Valued at $2.3bn, the SGR project aims to link the Indian Ocean port of Dar es Salaam to Lake Victoria’s port of Mwanza, with extensions to Rwanda, Burundi, the Democratic Republic of Congo, and Uganda.

The link is expected to boost economic growth by creating new trade routes for mining and agricultural commodities across Eastern and Central Africa.

In May 2024, Tanzania carried out the inaugural test run of a train on its SGR between major port city Dar es Salaam and its capital Dodoma.

The railway line is part of the Tanzanian Government’s $10bn SGR International Strategic Railway programme.

Earlier this year, the World Bank’s International Development Association (IDA) approved $200m in funding for the second phase of the intermodal rail and development plan aimed at improving the safety, resilience and efficiency of a railway line in Tanzania between Dar es Salaam and Isaka.

The project will include the refurbishment or rehabilitation of around 470km of railway track on the line and the installation of climate defences such as flood control systems.