The Standard Chartered Bank has loaned Tanzanian government Sh146.9 billion to fund the construction of the Standard Gauge (SGR) from Dar es Salaam to Makutupora.
The SGR project is one of the country’s biggest projects running approximately 550 kilometers long providing a safe and reliable means for efficiently transporting people and cargo to and from the existing Dar es Salaam Port.
Speaking during the sign-off deal, the country's minister of Finance and Planning, Philip Mpango said the project will enable the local communities to access social services.
“I am delighted to sign off this deal on behalf of my government. With the help of Standard Chartered and our partners, the project will increase direct employment and enable our local communities to thrive as they gain access to wider social services.” Mpango said.
The project will connect Dodoma to Dar es Salaam via Morogoro and Makutupora as well as enhance regional trade by connecting three countries Tanzania to Burundi, Rwanda and The Democratic Republic of Congo (DRC).
Chief executive officer Standard Chartered Tanzania, Sanjay Rughani said that the deal signified investor confidence in the market and the bank’s international network capabilities and commitment.
“The African continent remains a key corridor not only for Standard Chartered but also for our global clients and the SGR project will deliver benefits and support the government’s 2025 vision of making Tanzania an industrialized country,” Rughani said.
Rughani added that the Bank will continue to leverage its network reach to further position Tanzania as the go-to destination for investments.
The project has already created more than 8,000 new direct employment opportunities for the citizens and has opened up opportunities for the local communities surrounding the project area to access social services such as shelter and food.
Regional CEO, Standard Chartered Sunil Kaushal said the deal signified the benefit of unrivaled network capabilities into the region.
“There is a considerable appetite from the global investment community in Africa. We are proud to use our expertise to support the Government of Tanzania with the finance needed for the SGR project.” Kaushal said.
According to the Tanzania Railways Corporation, it is expected that the railway will address current congestion challenges and decrease freight service charges by 40 percent as the railway will be able to haul up to 10,000 tons of freight, equivalent to 500 lorries, per trip.
The project’s biggest component of financing comes from the Export Credit Agency Covered Facility from the Export Credit Agencies of Denmark and Sweden.
Other partners in support of the project included the trade and development bank (TDB) and the African Export-Import Bank (Afrexim).
The funding will enable the project to be completed in good time as per the set plans.
Tanzania is following in Kenya's footsteps which has completed the second phase of its SGR intended to reach the Ugandan border.
