Germany’s KfW IPEX-Bank has approved $300m (£235m) in financing for Uganda’s Standard Gauge Railway (SGR), bringing the long-delayed $2.7billion project to astart
Uganda’s Standard Gauge Railway (SGR) project is a 273-kilometer planned railway network running from Malaba on the Kenya border to Kampala. The €2.7 billion ($3.15 billion) construction contract, initially awarded to Turkish firm Yapı Merkezi, has recently faced unexpected political disruptions following calls for contract cancellation and protests.
The bank confirmed it has completed its internal approval processes for the financing during talks in Frankfurt between Uganda’s Deputy Head of Mission in Berlin, Ambassador Danny Ssozi, and two senior KfW IPEX-Bank officials: Jens-Oliver Schünzel, who heads the bank’s land-based transportation financing for Europe, the Middle East, Africa and Central Asia, and Sylvia Sedlacek, director for mobility and land-based transport.
An initial tranche of around $200m is expected to be disbursed once outstanding documentation and financing agreements are finalised, officials said.
The SGR — a planned 272km line linking Kampala to the Kenyan border town of Malaba — has been stalled for more than a decade after an earlier financing arrangement with a Chinese contractor collapsed in 2023. Uganda has since signed a new construction deal with the Turkish firm Yapi Merkezi, which began preliminary works last year.
Citibank is acting as lead arranger and coordinator of the project’s lender consortium. KfW’s approval forms part of a broader financing structure that also includes export credit agencies, a planned sovereign sukuk bond, and contributions from the Ugandan government.
Other lenders have moved in recent weeks too. The Islamic Development Bank approved a €650.75m package for the railway on 19 June — its largest single-project commitment to Uganda to date — while the World Bank has also signalled it is considering support.
Ugandan officials have set a target of November 2026 to reach full financial close on the project.
Once complete, the railway is expected to cut freight transit times between Mombasa and Kampala from several days to under 24 hours, and reduce the cost of moving a shipping container by around half, according to government estimates. More than 90% of Uganda’s freight currently travels by road.
Speaking after the Frankfurt meeting, officials from both sides described the discussions as positive, saying they reflected continued confidence among German financial institutions in Uganda’s infrastructure plans.
The SGR will reduce the cost of transporting a 20-foot container from Mombasa Port to Kampala by half; from 3,200 dollars (UGX11.6 million) to 1,600 dollars (UGX5.8 million). This will lower the cost of doing business in Uganda.
The works and transport ministry permanent secretary, Waiswa Bageya, said Uganda SGR is a railway system that will link Uganda with East African Community partners Kenya, Tanzania, Rwanda, Burundi, the Democratic Republic of Congo, and South Sudan.
The SGR project will be implemented in phases. After the Malaba-Kampala section, it will be extended to the borders of neighbouring countries, making a network of 1,724 kilometers.
The total cost of the project is three billion dollars.
