World Bank (Washington, DC)

24 April 2014

Africa: Tanzania - World Bank Approves U.S.$300 Million to Improve Rail and Transport Infrastructure and Boost Intra-Region Trade With Landlocked Neighbors

press release

Washington — The World Bank's Board of Executive Directors today approved US$300 million in funds from the International Development Association (IDA)* to support the Government of Tanzania's effort to create a reliable open access railway infrastructure on the Dar es Saalam-Isaka section of the East African Central Corridor and to strengthen the countries rail agencies' ability to manage the infrastructure, the traffic operations, and the network regulation. This project is a necessary first step to the eventual upgrade and expansion of the broader Central Corridor transport network.

"The location and the size of Tanzania, its mineral and agricultural resources, its tourism potential and its critical role as a transport hub for its landlocked neighbors, provide unrivaled opportunities for the development of modern transport infrastructure and services, said Philippe Dongier, the World Bank's Country Director for Tanzania. "We are excited to support the Government's efforts to rebuild its rail and intermodal transport system. The project will also indirectly help to boost agricultural trade, job creation and overall livelihoods for the country and neighboring countries' poorest people."

The financing will support the Intermodal and Rail Development Project designed to increase the reliability of the rail infrastructure and the train operations; strengthen logistics in the port of Dar es Salaam and the rail terminals; and strengthen rail operations. The funds will go to relaying rail tracks, building new intermodal terminals, repairing or reconstructing bridges and supporting the institutional transformation of the sector.

"Besides constraining economic activity in Tanzania and reducing the competitiveness of the country's tradable sectors, poor infrastructure on the East African Central Corridor creates delays and high costs for transport of goods between Tanzania and its landlocked neighbors (Rwanda, Burundi, and Uganda), as well as the Democratic Republic of Congo (DRC)", said Henry des Longchamps the World Bank Task Team Leader for the project. "The project will help improve a critical link in the regional rail network that is necessary for both competitiveness and improved regional and global economic integration."

The project contributes to the World Bank Group's (WBG) two broad goals of ending extreme poverty and boosting shared prosperity. Rehabilitating and upgrading the rail line will improve the transport linkages for the population living in the western part of Tanzania, an area that has a high concentration of agricultural activity.

"The project will help increase transport capacity in Tanzania which will build competitive alternatives to road transport, and lead to greater traffic volumes that will facilitate the development of economic activities and job creation along the corridor areas," said Yonas Mchomvu the World Bank co-Task Team Leader for the project.

* The World Bank's International Development Association (IDA), established in 1960, helps the world's poorest countries by providing zero-interest loans and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people's lives. IDA is one of the largest sources of assistance for the world's 82 poorest countries, 40 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $16 billion over the last three years, with about 50 percent of commitments going to Africa.

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