Thursday, February 13, 2020

STANDARD CHARTERED GIVES TANZANIA $1.46 BILLION LOAN TO FINANCE SGR PROJECT

By Osoro Nyawangah, Dar es Salaam, Tanzania

The Government of Tanzania yesterday signed a facility agreement with Standard Chartered Bank for a $1.46 Billion (Sh3.37 Trillion) concessional loan to fund the construction of Standard Gauge Railway (SGR) project from Dar es Salaam to Makutupora in Dodoma region.


Minister of Finance and Planning, Philip Mpango (L) exchanging documents with Chief Executive Officer of Standard Chartered Tanzania, Sanjay Rughani
Running approximately 550 kilometres long, the railway project is one of the country’s biggest projects connecting the capital city Dodoma to the business city of Dar es Salaam.

Once complete, the railway will provide a safe and reliable means for efficiently transporting people and cargo to and from the Dar es Salaam Port.  

According to the Tanzania Railways Corporation, the SGR is expected to 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 transport trucks, per trip.

Upon completion, the SGR is expected to usher in the country, for the first time, a fast and modern passenger train with a speed of 160 km per hour and a freight train with a top speed of 120 km per hour.

It will also connect Tanzania to Burundi, Rwanda and The Democratic Republic of Congo, DRC, thereby playing a key role in enhancing regional trade and ease the flow of goods and people in the neighbouring landlocked countries of Uganda, Zambia among others.

The project has already created more than 8,000 new direct employment opportunities for Tanzanians and has opened up opportunities for the local communities surrounding the project area to access social services such as shelter and food.

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 comes from the Export Credit Agency Covered Facility from the Export Credit Agencies of Denmark and Sweden.

Speaking at the signing event, the Minister of Finance and Planning, Philip Mpango, commended and thanked Standard Chartered Tanzania for the loan.

“I am very delighted to sign off on this deal on behalf of the Government of Tanzania and its people. With the help of Standard Chartered and our partners.” He said adding that the project financing will further increase direct employment in Tanzania, and more importantly, enable local communities gain access to wider social services such as food and housing.

The Minister also thanked the Governments of Sweden and Denmark, which were represented by their Ambassadors in Tanzania, for their confidence in the country’s economic growth. 

Mpango noted that the funding would enable the project to be completed in good time as per the set plans.

Chief Executive Officer of Standard Chartered Tanzania, Sanjay Rughani, said the deal signified investor confidence in the market and demonstrated the bank’s international network capabilities and commitment to Tanzania.

“We are delighted to have reached this milestone in Tanzania to fund the SGR project that will deliver massive benefits to Tanzania and support the government’s 2025 vision of making Tanzania an industrialised country.” Rughani said.

The CEO added that the Bank will continue to leverage its unique network reach, and the credibility it has built over time, to further position Tanzania as the go-to destination for investments.

The event was also attended by the Ambassador of Denmark to Tanzania, Mette Norgaard Dissing-Spandet and the Ambassador of Sweden to Tanzania, Anders Sjoberg, Ambassador of Italy to Tanzania, Robert Mengoni, and Calumm Mcallum, Country Director, International Trade – for the British High Commission.

Other key Government Officials included the Permanent Secretary from the Ministry of Finance and Planning, Doto James, Deputy Governor of the Bank of Tanzania responsible for Economic and Financial Policies, Yamungu Kayandabila, and the Director General of the Tanzania Railway Corporation, Masanja Kadogosa. 


Currently, Tanzania railways network include TRC gauge  which is 1,000 mm (3 ft 3 38 inand the length about 2,600 kilometres (1,600 mi). Two east-west lines linking the coast and the hinterland were built under colonial rule as German East Africa: the Central line runs from Dar es Salaam to Kigoma, and the Tanga line from Tanga to Arusha.

A north-south connection, from Korogwe to Ruvu, links the two lines. The main line runs to Lake Victoria where a connection operates via Lake Victoria train ferries with the Uganda Railway. From the Tanga line a line to Kenya is disused.

There is a break-of-gauge at Dar es Salaam to the Tanzania-Zambia Railway Authority (TAZARA) 1,067 mm (3 ft 6 in) line to Zambia. A second link is at Kidatu, where the TAZARA line meets the Kidatu branch. - Africa

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