Uganda has appointed Citibank to arrange financing for a US$3.19 billion standard gauge railway project linking Kampala to the Kenyan border, as it seeks to revive a long-delayed infrastructure plan aimed at boosting regional trade.
Finance Ministry Permanent Secretary Ramathan Ggoobi said Citibank would act as lead arranger, coordinating funding for the rail line, which is expected to improve connectivity and reduce freight costs.
USGgoobi made the announcement during a meeting of finance ministers from Uganda, Kenya and Rwanda on the sidelines of the Spring Meetings of the International Monetary Fund and the World Bank Group in Washington.
He added that Uganda has also opened discussions with the World Bank to explore potential support for the project.
The railway, estimated at 2.7 billion euros, will connect Kampala to Malaba on the Kenyan border, forming part of a broader regional network designed to link landlocked countries to the Indian Ocean port of Mombasa.
Uganda’s move marks a shift away from earlier plans backed by China. The government had initially awarded the project to China Harbour Engineering Company in 2015, on the condition that the contractor would secure financing from Beijing.
After years of delays in securing funding, Kampala cancelled the contract in January 2023 and later signed a new agreement in October 2024 with Turkish construction firm Yapi Merkezi to build the line.
The project is expected to integrate with Kenya’s existing standard gauge railway, which connects the port city of Mombasa to Nairobi and Naivasha.
In March, Kenyan President William Ruto launched construction of a new phase extending the railway from Naivasha to Kisumu, with plans to eventually link the network to the Ugandan border.
Officials say the Uganda-Kenya link is a key step toward creating a regional rail corridor that could extend to other landlocked countries, including Rwanda, South Sudan and the Democratic Republic of the Congo.
Analysts say the project could significantly reduce transport costs, improve trade competitiveness and ease congestion on regional road networks, which currently handle the bulk of freight.
However, financing remains a major challenge, with governments increasingly seeking diversified funding sources beyond traditional bilateral lenders.
Uganda’s decision to appoint Citibank and engage multilateral institutions reflects a broader trend among African countries to pursue more complex financing structures for large infrastructure projects.
If completed, the railway is expected to play a central role in strengthening regional integration and facilitating trade flows across East and Central Africa.
