Tanzania is seeking $280 million from Turkey’s Exim Bank to close a financing gap for the construction of two sections of the Standard Gauge Railway (SGR), with the lender’s board expected to consider the application this month.
The funding would complete the financing package for the third and fourth sections of the railway, which cover more than 700 kilometres and are estimated to cost $1.6 billion.
Finance Minister Ambassador Khamis Mussa Omar said Tanzania had already secured $1.32 billion, leaving $280 million outstanding to meet the total project cost.
The discussions took place in Antalya, Turkey, on the sidelines of the 31st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP31), where Ambassador Omar led a Tanzanian delegation in talks with Turkish Exim Bank Managing Director Ali Guney.
Mr Guney said the bank's board of directors would meet this month to consider Tanzania's financing request, signalling a key step towards securing the funds required to advance the project.
For Tanzania, the proposed financing is important to maintaining progress on a railway network expected to improve passenger and freight transport, reduce logistical constraints and strengthen trade links with neighbouring countries.
“SGR is a major infrastructure project covering more than 2,000 kilometres, intended to connect the port city of Dar es Salaam on the eastern coast with western regions, including Mwanza and Kigoma, and neighbouring countries such as Rwanda, Uganda, Burundi and the Democratic Republic of Congo,” Ambassador Omar said.
The railway is being implemented in six sections, or lots. The first two, linking Dar es Salaam and Dodoma, have been completed and are operational.
Completion of the remaining sections is expected to extend the network towards the country's western and north-western regions, improving access to markets and strengthening Tanzania's position as a regional transport and trade hub.
Unlike several railway networks in the region that rely on diesel-powered locomotives, Tanzania's SGR uses electric trains. Ambassador Omar said this was consistent with efforts to promote cleaner energy and more environmentally sustainable transport systems.
The discussions also pointed to a broader economic partnership between Tanzania and Turkey beyond railway financing.
Mr Guney said the bank was considering other areas of cooperation, including trade, investment and financing for future infrastructure projects, particularly roads and bridges.
Expanding such cooperation could help Tanzania mobilise additional financing for infrastructure while creating opportunities for businesses in both countries.
The talks also reflect efforts by President Samia Suluhu Hassan and Turkish President Recep Tayyip Erdogan to increase bilateral trade to at least $1 billion.
Achieving that target will require stronger commercial links, increased investment and improved infrastructure to facilitate the movement of goods and services between the two countries.
The outcome of the Turkish Exim Bank board meeting will therefore be important in determining whether Tanzania secures the outstanding $280 million needed to complete the financing package for the two SGR sections.