The Islamic Development Bank has approved nearly $755 million in financing to support Uganda’s standard gauge railway project linking Malaba to Kampala. The funding marks a major step forward for the long-delayed infrastructure project, which is expected to improve regional connectivity, reduce freight delays, and strengthen Uganda’s access to the Port of Mombasa.
Uganda secured €650.75 million, equivalent to about $754.8 million, from the Islamic Development Bank for the railway project. The Malaba-Kampala line is part of a wider effort to connect landlocked Uganda to Kenya’s railway network and improve trade links across East Africa.
The project is valued at around €2.7 billion and has faced repeated delays since 2015 due to challenges in securing financing. The construction contract was first awarded to China Harbour Engineering Company, which was also expected to help arrange funding, but it was later reassigned to Turkish engineering group Yapi Merkezi.
The current financing plan includes support from export credit agencies, development finance institutions, and sukuk financing. Uganda’s Ministry of Finance has indicated that export credit agencies are expected to cover 60% of project costs, development finance institutions 25%, and sukuk financing the remaining 15%, with Citibank appointed as lead arranger and coordinator.
The railway is expected to play a strategic role in reducing Uganda’s dependence on road freight, as more than 90% of the country’s cargo currently moves by road. Once operational, the Malaba-Kampala railway could cut cargo transit times between Mombasa and Kampala from about five days to less than 24 hours.
Authorities also expect the project to reduce transport costs by as much as 40%, helping lower logistics expenses and ease pressure on Uganda’s road infrastructure. By improving freight movement and regional trade efficiency, the railway is expected to support economic growth and strengthen Uganda’s position within East Africa’s transport network.
