Tanzania: $1.46bn Deal for SGR Project in the Pipeline

THE government will sign a 1.46 billion US dollars loan agreement with domestic and international lenders mid next month for construction of the standard gauge railway from Morogoro to Makutopora in Singida.

The Minister for Finance and Planning, Dr Phillip Mpango said in Dar es Salaam on Thursday that some domestic lenders had taken part to raise funds for the construction of the second phase of the railway line, one of major infrastructure projects undertaken by the government.

"Before the 17th of December, we will sign a loan agreement with domestic and international banks for borrowing about 1.46 billion US dollars for the work," said the minister in his opening remarks for a 19th Conference of Financial Institu tions.

The government announced in September 2017 to have awarded a 1.92 billion US dollars contract to a Turkish firm, Yapi Merkezi Insaat VE Sanayi As, to construct a 422-km (262-mile) high-speed electric railway line from Morogoro to Makutopora in Singida Region.

The Turkish firm was contracted to design and construct the railway line that will have the capacity to transport 17 million tonnes of cargo per year, Reli Assets Holding Company Ltd (RAHCO), which oversees the project, had said in a statement It was the second major infrastructure project won by the Turkish company in Tanzania after signing a 1.215 billion US dollars deal with the government in early 2017, to construct the first phase of the railway line from Dar es Salaam to Morogoro.

The finance minister said yesterday that construction works for the Dar es Salaam - Morogoro stretch of the railway line had reached 60 per cent.

The government announced in 2017 that it planned to spend 14.2 billion US dollars to build a 2,561 km standard gauge railway network connecting the Indian Ocean port of Dar es Salaam to Kigoma and Mwanza regions, as well as Uganda and Rwanda.

Possibilities to extend the line to Burundi and the Democratic Republic of Congo is currently being explored.

According to information posted on the Yapi Merkezi web site, the total length of the railway will be 409 kilometres along with a workshop, depot and siding tracks and the project will be completed within 36 months.

Being the region's first inter-city electrical railway system with a speed of 160km/hr, the Morogoro- Makutupora Railway project will be built with the Standard Gauge of 1,435 millimeters.

Tanzania wants to profit from its long coastline and upgrade its railways network and roads to serve the growing economies in east and central Africa.

Two multilateral financial institutions confirmed to the 'Daily News' recently that they were raising funds for infrastructure development in Tanzania.

The President and Chief Executive Officer for Eastern and Southern African Trade and Development Bank, Admassu Tadesse, told the newspaper that they were pooling resources for Tanzania.

"We have approved 500 million US dollars syndicated loan for Tanzania," he said on the sidelines of the Africa Investment Forum in Johannesburg, South Africa, recently. "We have been mandated to arrange 500 million US dollars for Tanzania by pooling resources from development and finance institutions, said the head of the multilateral, treaty-based development financial institution, formerly the PTA Bank.

The bank's mandate is to finance and foster trade, regional economic integration and sustainable development through trade finance, project and infrastructure finance, asset management and business advisory services.

A senior director, Investment Group, Taiwo Adeniji, told the 'Daily News' that they had approved 85 million US dollars towards financing construction of the railway line.

He said they had joined a group of development and financial institutions which are pooling finances for infrastructure development for Tanzania.

"Trade and Development Bank is raising funding for Tanzania and AFC is part of the transaction. We have contributed 85 million US dollars," said the head of the multi-lateral African financial institution that provides project structuring expertise and risk capital to address Africa's infrastructure development needs.

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