TANZANIA – China Civil Engineering Construction Corporation (CCECC) and China Railway Construction Company (CRCC) have been awarded the contract to build a 341-kilometre Standard Gauge railway (SGR) line connecting the Tanzania’s Lake City of Mwanza to Isaka.

Tanzania’s Foreign Affairs Minister Palamagamba Kabudi said the government will finance the railway line, which costs US$1.32 billion.

The railway project is the fifth and last phase of Tanzania’s SGR under construction, ultimately connecting Mwanza to the Port City of Dar es Salaam.

Phase 1 of Tanzania’s SGR is a 202-kilometre railway connecting Dar es Salaam and Morogoro, and Phase 2 is 348 kilometres connecting Morogoro and Makutupora while Phase 3 is 294 kilometres connecting Makutopora and Tabor while Phase 4 is 130 kilometres connecting Tabora and Isaka.

Phase one of the project is at its final stages, slated for trials in April 2021 while Phase two is 50% complete.

The new railway line will replace the country’s old meter gauge railway, reduce congestion, and lower transport costs. 

“The railway will address current congestion challenges and decrease freight service charges by 40%, as the railway will be able to haul up to 10,000 tons of freight, equivalent to 500 lorries, per trip. It will also connect Tanzania to Burundi, Rwanda and The Democratic Republic of Congo, DRC, thereby playing a key role in enhancing regional trade”

AllAfrica reported that the Tanzanian SGR will cut freight costs by up to 40%, as each freight train will transport up to 10,000 tonnes per trip.

The SGR will also connect Tanzania to Burundi, DRC, and Rwanda, boosting regional trade.

In February 2020, the Government of Tanzania through the Ministry of Finance signed a facility agreement with Standard Chartered Tanzania for a US$ 1.46 billion term loan financing to fund the construction of the Standard Gauge Railway (SGR) project from Dar es Salaam to Makutupora.

Running approximately 550 kilometres long, the SGR project is one of the country’s biggest projects connecting Dodoma to Dar es Salaam via Morogoro and Makutupora.

Standard Chartered Tanzania acted as Global Co-ordinator, Bookrunner and Mandated Lead Arranger on the facility agreement that is the largest foreign currency financing raised by the Ministry of Finance to date.

The biggest component of financing came from the Export Credit Agency Covered Facility(‘s) from the Export Credit Agencies of Denmark and Sweden.

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