Uganda Resubmits China Loan Request for $2.3 Billion Railway

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Uganda resubmitted a loan request to China for a 271-kilometer (168-mile) railway linking its capital, Kampala, with the Kenyan border after re-negotiating the contract price and improving security.

The government of East Africa’s third-biggest economy submitted the application to the Export Import Bank of China in September to provide 85% of the project cost, Perez Wamburu, coordinator of the Standard Gauge Railway Project, said by email. The project cost was cut by $26 million.

According to Bloomberg media, the initial loan request was delayed after the lender sought a comprehensive feasibility study, which has since been submitted.

An additional link was added from Kampala to the nearby Bukasa port on Lake Victoria as well as fencing for the entire railway route to protect it from vandalism. The spur to Lake Victoria, which the country shares with Tanzania and Kenya, is set to handle imports and exports via the neighboring countries.

Uganda, Kenya, Rwanda and South Sudan agreed in 2014 to build standard gauge railways in their territories as part of a regional plan to cut transportation costs.

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“Kenya and Uganda continue to discuss harmonization of construction timelines and construction is expected to resume once the outstanding issues are addressed,” Wamburu said.

Uganda has already acquired 126 kilometers of the corridor for the Malaba-Kampala SGR with land acquisition for the route expected to be concluded by June 2022, the official said.

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