The African Development Bank (AfDB) has reached an agreement with Deutsche Bank and Societe Generale on a funding syndication strategy. The agreement is a ground-breaking step toward African infrastructure development, raising up to $1.2 billion for Tanzania's ambitious Standard Gauge Railway (SGR) project. The deal was officially inked during a recent event in Morocco. The multibillion-dollar initiative, which aims to change regional connectivity, is already making progress. It entails the building of a 411-kilometer railway line from the inner-city of Tabora to the coast of Kigoma. Tanzania's ministry of finance is aiming to fund the project through foreign financial markets. At present, the project is worth $2.3 billion. Furthermore, the government believes that once finished, it will have a significant impact on East Africa's economic landscape.

Mr. Max Ndiaye, Senior Director for Alliances at the African Development Bank, emphasized the strategic relevance of Tanzania's SGR. This alliance is a big step forward not only for Tanzania, but for Africa's interconnected economic destiny. The railway will serve as a vital link in strengthening intra-African trade. It will also improve connectivity between regions and unlock the continent's enormous revenue potential, he added. The financial endeavour is being divided into two tranches. The AfDB has decided to take the initiative in arranging the second tranche. Furthermore, it is predicted that contributions will come from a wide spectrum of financial institutions.

The railway is expected to link Tanzania's city of Dar es Salaam on the Indian Ocean to Mwanza, an inland port. There are also ambitions to expand into neighbouring nations, ensuring a more diverse transportation system. These countries include Rwanda, Burundi, Uganda, and the Democratic Republic of the Congo. Myriam Ouazzani, Managing Director of Deutsche Bank for Africa, and Radolph Fotso, Head of DFI Solutions at Societe Generale, both highlighted the agreement's significance. This demonstrated the private sector's commitment to Africa's infrastructure and development goals.

Tanzania's SGR has been considered as a vital project that, once completed, will provide numerous prospects. We are thrilled to be a part of this historic project. According to Ouazzani, the SGR will not solely connect countries but also create jobs and foster regional economic integration. East Africa's infrastructure is frequently viewed as a bottleneck in terms of growth. However, the SGR initiative serves as a light of hope. Once fully operating, the line will facilitate the transit of goods and commodities, save logistics costs, and reinforce the region's position as a significant player in global trade.

Posted on : 15 Jan,2025