By Business Insider Reporter
Tanzania has achieved a significant milestone in its regional infrastructure agenda, securing the largest share of the OPEC Fund for International Development’s newly announced US$225 million investment package for Africa, Business Insider can authoritatively report.
According to senior officials from the Ministry of Transport and local logistics sources, Tanzania will receive US$75 million from the fund to kickstart construction of the Uvinza–Malagarasi section of its Standard Gauge Railway (SGR).
In January, Tanzania and Burundi signed a US$2.15 billion agreement to construct a 282-kilometre SGR line linking Uvinza in western Tanzania to Musongati in Burundi.
US$150 Credit Facility
The railway is designed to facilitate regional trade and strengthen economic integration across East and Central Africa. The project is a critical component of the country’s broader efforts to enhance cross-border connectivity and boost trade within the Great Lakes region.
Business Insider has reliably learned that the US$75 million loan represents the first tranche of a broader US$150 million credit facility co-financed by the African Development Bank (AfDB) and other development partners.
“Once completed, this segment will form a vital transport corridor connecting Tanzania with Burundi and the Democratic Republic of the Congo (DRC), unlocking new inland trade routes to the Indian Ocean via Tanzanian ports,” said a senior member of the Tanzania Shippers Council (TSC), who spoke on condition of anonymity.
“This is a major step forward for Tanzania’s logistics and trade infrastructure,” the source added. “With this funding secured, we are laying tracks not just for trains — but for regional prosperity and integration.”
From Local Tracks to Regional Impact
The Uvinza–Malagarasi segment forms part of Tanzania’s ambitious multi-phase US$10.04 billion (TSh 24 trillion) SGR project, which aims to modernize outdated transport infrastructure, improve freight efficiency, and increase the country’s competitiveness as a regional logistics hub.
The full vision is to connect the Tanzanian coast with inland neighbors, reducing transport costs and creating new opportunities for trade, employment, and industrialization.
The investment underscores Tanzania’s growing role in regional supply chains, particularly for landlocked economies like Burundi and eastern DRC that rely heavily on Tanzanian ports for imports and exports.
Presidential Endorsement
According to OPEC Fund President Abdulhamid Alkhalifa, Tanzania’s SGR project is a flagship example of the institution’s development approach.
“With projects like Tanzania’s railway, we are helping to build transport corridors that unlock trade and economic potential across entire regions,” he said. “This is about delivering practical, people-centered solutions that align with our partners’ goals.”
The OPEC Fund, founded in 1976, is the only global development institution that channels funding exclusively from member countries to non-member developing nations. To date, it has committed over US$29 billion to projects in 125+ countries, mobilizing more than US$200 billion in total investment.
Commenting on the Tanzania-Burundi SGR deal, President Dr Samia Suluhu Hassan, said: “This railway project reflects our commitment to building a modern, connected Tanzania that is open for trade, investment, and opportunity.”
AfDB Commits Nearly US$700m for SGR Project
In a major boost to East Africa’s cross-border infrastructure development, the Board of Directors of the African Development Bank (AfDB) approved a comprehensive financing package worth US$696.41 million in December 2023, aimed at launching Phase II of the joint Standard Gauge Railway (SGR) project between Tanzania, Burundi, and the Democratic Republic of the Congo (DRC).
The funding will support the construction of a 651-kilometer stretch along the Tanzania–Burundi SGR corridor, which will feature a single-track electrified standard gauge railway, marking a significant advancement in the region’s modern rail infrastructure.
The section is divided into three critical segments:
- Tabora–Kigoma (411 km) in Tanzania,
- Uvinza–Malagarasi (156 km) in Tanzania, and
- Malagarasi–Musongati (84 km) in Burundi.
According to an AfDB statement released on December 12, 2023, Tanzania will receive US$597.79 million in the form of concessional loans and guarantees, while Burundi will benefit from US$98.62 million in grant financing.
Mobilizing US$3.2 Billion
“As the Initial Mandated Lead Arranger (IMLA), the AfDB will also spearhead efforts to mobilize an additional US$3.2 billion in co-financing from commercial banks, Development Finance Institutions (DFIs), Export Credit Agencies (ECAs), and institutional investors. The total cost of the joint project between Tanzania and Burundi is estimated at nearly US$3.93 billion.”
The initiative has been designated a strategic priority under several major continental infrastructure frameworks, including:
- The East African Community (EAC) Rail Master Plan,
- The African Union’s Programme for Infrastructure Development in Africa (PIDA).
“This transformative project is expected to catalyze regional trade, reduce transportation costs, and enhance mobility across East and Central Africa,” the Bank stated, adding that it will drive inclusive economic growth and social development not only in the partner countries but across the wider Great Lakes region.
Upon completion, the SGR corridor is poised to become a vital logistics artery linking landlocked Burundi and the DRC to Tanzanian ports on the Indian Ocean—unlocking new opportunities for industrialization, value-added exports, and regional integration.
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