The Islamic Development Bank recently approved a loan of 650.75 million euros for the standard gauge railway project from Kampala, Uganda to Malabar on the Kenyan border. After the completion of this 272 kilometer electrified railway, the transit time for freight transportation will be reduced from 5 days to within 24 hours, and transportation costs will be reduced by up to 40%.

This project is a key gateway connecting Uganda's SGR network in Kenya and the port of Mombasa in the Indian Ocean, and has strategic significance for the import and export trade of this landlocked country. The total project investment is approximately 2.7 billion euros, and the injection of funds from the Islamic Development Bank provides critical support for the comprehensive construction. The World Bank is evaluating further financing options, and the participation of multiple international financial institutions has added certainty to the project's progress.

The contract has undergone two changes

The construction contract for the line was initially awarded to China Harbour Engineering Company in 2015, with a contract amount of approximately 2.3 billion US dollars, subject to the prerequisite of financial support from the Chinese government. Due to the long-term failure to secure financing, the contract was cancelled in January 2023.

In October 2024, the Ugandan government signed a new contract with Türkiye's civil engineering contractor Yapi Merkezi. The preliminary preparation work has been initiated with government funds, and once the loan from the Islamic Development Bank is in place, the project will enter the comprehensive construction phase. The project is designed with electrified standard gauge, covering a total length of 272 kilometers. After completion, it will completely change the situation of insufficient transportation capacity and delayed delivery of Uganda's existing meter gauge railway.

Key puzzle of East African railway network

Uganda currently relies mainly on road transportation and aging meter gauge railways. Goods imported through Mombasa port need to travel for several days before reaching Kampala, resulting in high logistics costs. After the opening of the standard gauge railway, the transit time for goods from Kampala to Mombasa will be reduced from 5 days to within 24 hours, and the cost is expected to decrease by 40%. This improvement will directly enhance the international competitiveness of Uganda's exported products such as coffee, tea, and minerals, while reducing the terminal prices of imported industrial products. Keywords: railway transportation, infrastructure

After the line is connected to the SGR network in Kenya, Uganda will be substantially integrated into the East African railway interconnection system. The Islamic Development Bank delegation completed the financing evaluation after on-site inspection in February 2026, and the project is expected to enter the main construction phase within 2026.Editor/Cheng Liting