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.
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| 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 3⁄8 in) and 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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