Tanzania gets $7.6bn to build the Standard Gauge Railway

20
Jul

Tanzania gets $7.6bn to build the Standard Gauge Railway

President of Tanzania John Pombe Magufuli and EXIM Bank President Lui Liange

DAR ES SALAAM — Tanzania has secured a $7.6bn loan from China’s EXIM Bank to build a railway line that will link Tanzania to its neighbours, President John Magufuli’s office says.

Tanzania's move to upgrade its infrastructure will open more opportunity to neighbors like Uganda, Rwanda and Burundi that will have options to use the Southern Corridors for import and export and this will contributed to growing their economies.

Magufuli’s office said the EXIM Bank has agreed to provide the concessional loan to finance construction of a standard-gauge railway line, works on the project will commence in this financial year.

The announecment follows a business meeting between the government of Tanzania and EXIM Bank's President Liu Liange, in Dodoma on Wednesday.

"The planned standard-gauge railway line will improve regional trade links and help to boost the economies of Tanzania and its landlocked neighbours including Uganda, Rwanda, Burundi and the Democratic Republic of the Congo," the president’s office said.

Following Uganda, and Kenya's Oil discoveries is Tanzania's gas that makes East Africa region as a hotspot of resources but with a poor road and railway infrastructure. The Standard Gauge Railway is a major investment that will connect Tanzania to its neighbors and this come after Uganda and Tanzania had just signed an agreement to construct pipeline in Lamu.

Tanzania said in 2015 it had awarded contracts to Chinese firms to build new railway lines, expanding Beijing’s presence in East Africa.

In 2014 it signed an agreement with China Merchant Holding International to build a mega port and economic zone at Bagamoyo that is expected to cost $10bn.

China’s EXIM Bank is also financing a $1.2bn, 532km natural gas pipeline in Tanzania.

Tanzania’s finance and planning ministry said in a separate statement on Wednesday the country had secured a $200m loan from the African Development Bank to finance transport infrastructure projects.

Reuters