Uganda: ‘Negotiation for financing of SGR project are ongoing’

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The Uganda Railways Corporation’s (URC), new managing director, Stanley Ssendegeya, says the government is negotiating with the Export-Import (Exim ) Bank of China for the financing of the construction of the proposed Standard Gauge Railway (SGR) project.

Ssendegeya explained that the financing, amounting to at least $2bn, might be available in a year or less. ‘In a year or less, the funding will be on board and we expect the construction works to begin in the first or the second year following the conclusion of the negotiations.’

This is the new development following the previous announcement that the government had put the SGR project on hold to invest in revamping the old meter-gauge railway from Kampala to Malaba on the Kenyan border.

Plans to extend the rail line to South Sudan

On the other hand, earlier this month the Finance Minister Matia Kasaija  said that the government contemplates extending the railway line to South Sudan in the case of availability of funds.

‘Being the cheapest means of transport, railway investments need to be prioritised. If we rehabilitate the meter-gauge railway all the way to Tororo and if money allows us, we may have to build it up to South Sudan,’ he said.

South Sudan is an integral part of Uganda’s export market being the second-highest destination after the republic of Kenya. Last year, Uganda’s exports to South Sudan amounted to about $351.5 million. Therefore, extending the railway line would reduce the cost of exports to the country and consequently increase Uganda’s export earnings.

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