Tanzania secures $1.2 billion commercial financing for Tabora–Kigoma railway

Overview

Updated 1 hour ago

Tanzania signed a $1.2 billion commercial loan on November 4 to build a 411-kilometre electrified railway from Tabora to Kigoma, on the shore of Lake Tanganyika. Nine banks provided the money. An $800 million partial credit guarantee from the African Development Bank covers $720 million of the lending if Tanzania defaults.

The line is Lot 6 of Tanzania's Standard Gauge Railway, a programme to replace colonial-era narrow-gauge track with electric rail. If the rest of the $2.3 billion package closes, the route would give eastern Congo and Burundi a rail link to the port of Dar es Salaam.

Why it matters

Landlocked Burundi and eastern Congo would gain electric rail access to the Indian Ocean, a cheaper route for copper and farm exports.

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Key Indicators

$1.2B

Commercial facility signed

Nine-bank syndicate loan signed November 4, 2026.

$800M

AfDB partial credit guarantee

Covers principal and two years of interest; the bank's largest such guarantee to date.

411 km

Length of Tabora–Kigoma line

Electrified main line, plus 95 kilometres of passing loops.

$2.3B

Total financing package

Commercial tranche plus an export credit agency tranche and a co-guarantor tranche.

$405.5M

Exposure placed with insurers

Credit insurance arranged by broker Texel, including Lloyd's syndicates.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Samia Suluhu Hassan

President of Tanzania

In office

Machibya Shiwa

Director General, Tanzania Railways Corporation

In office

Max Ndiaye

Senior Director for Syndications, Cofinancing, and the Africa Investment Forum, African Development Bank

In office

Organizations Involved

African Development Bank

Multilateral development bank

Initial mandated lead arranger and guarantor of record

The African Development Bank arranged and guaranteed Tanzania's commercial railway loan.

Tanzania Railways Corporation

State-owned railway operator

Building the Tabora–Kigoma section

The state-owned operator is delivering Lot 6 under a design-and-build contract.

Deutsche Bank

Financial Institution

Co-arranger of the syndicate

Deutsche Bank co-arranged the nine-bank syndicate for Tanzania's railway loan.

Société Générale

Commercial bank

Co-arranger of the syndicate

Société Générale co-arranged the syndicate with Deutsche Bank.

Ministry of Finance, Tanzania

Government ministry

Borrower and coordinator

The ministry led Tanzania's search for international financing for the railway.

Timeline

December 2024 November 2026

4 events Latest: 3 days ago

Tap a bar to jump to that date

November 2026
Financing close reported
Latest Report

Construction Review reports the $1.2 billion facility for Lot 6, citing the $800 million AfDB partial credit guarantee.
3 days ago
Tanzania signs $1.2 billion commercial facility
Financing

Nine banks commit $720 million in guaranteed lending and $480 million against sovereign risk, backed by an $800 million AfDB guarantee.
5 days ago
July 2026
Foundation stone laid for Tabora–Kigoma line
Construction

President Samia Suluhu Hassan launches construction in Kigoma; TRC sets a 48-month design-and-build schedule.
July 20th, 2026
December 2024
AfDB signs syndication coordination letter
Financing

AfDB, Deutsche Bank and Société Générale agree a strategy to raise up to $1.2 billion for Tanzania's railway.
December 11th, 2024

Scenarios

Remaining $1.1 billion of package reaches financial close

Likely Resolves by End of 2027

Discussed by: African Development Bank; Tanzania Ministry of Finance

The $1.2 billion commercial tranche is part of a $2.3 billion package. The rest comprises an export credit agency tranche and a tranche to be mobilised with a co-guarantor. Closing them would fund the full Lot 6 build.

Tabora–Kigoma line opens for commercial service

Possible Resolves by End of 2031

Discussed by: Tanzania Railways Corporation

TRC targets 48 months of construction under a design-and-build contract, with work split across sections. Opening would link Kigoma's lake port to the wider network and Dar es Salaam.

AfDB raises new commercial debt for another SGR lot

Possible Resolves by Q2 2028

Discussed by: African Development Bank

Tanzania mandated the bank to structure and raise up to $3.2 billion for the wider railway programme. A second syndicated facility would test whether the guarantee-and-insurance model travels to other lots.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

1970–1975

Tanzania–Zambia Railway (TAZARA) (1970–1975)

China financed and built a railway from Zambia's copper belt to the port of Dar es Salaam, giving landlocked Zambia an export route that bypassed Rhodesia and South Africa. Thousands of Chinese and Tanzanian workers laid track across difficult terrain.

Then

The line opened in 1975 and carried freight and passengers between Zambia and Tanzania.

Now

Traffic never reached projections, and maintenance and debt problems persisted for decades.

Why this matters now

It shows that external financing can build strategic rail, but traffic volumes decide whether the line pays for itself.

2017

Mombasa–Nairobi Standard Gauge Railway (2017)

Kenya opened a Chinese-financed standard gauge line between its main port and capital, the first phase of a planned regional network. The government borrowed heavily and projected large freight volumes.

Then

Passenger ridership was strong; freight traffic grew more slowly than forecast.

Now

Debt service became a fiscal burden, and later phases stalled over financing.

Why this matters now

Tanzania's SGR faces the same test: whether cargo materialises to service the commercial debt.