Uganda and Kenya's $6 Billion Bid: Reviving the Joint SGR Project to Boost East Africa's Connectivity and Trade

 In a bid to revive the stalled joint standard gauge railway (SGR) project, Uganda and Kenya are actively seeking $6 billion from multiple lenders. The project, initially financed by China, faced setbacks when the Chinese pulled out. The two countries aim to improve cargo flow and enhance the competitiveness of the Northern Corridor, rivaling Tanzania's Central Corridor.

Under the new plan, the railway line will extend from Naivasha to Malaba, Kampala, Kasese, Mpondwe (near Congo), and even connect to Rwanda through a branch line from Bihanga to Mirama Hills. Once completed, the SGR will efficiently transport goods from Mombasa to the Ugandan border with the Democratic Republic of Congo (DRC), Rwanda, and South Sudan.

Both Uganda and Kenya are aggressively searching for financiers from Europe and the Middle East. Kenya's Transport Cabinet Secretary Kipchumba Murkomen humorously stated, "We are now going for financiers either from Europe or United Arab Emirates, or whoever comes with a good deal for our people in East Africa."

While Uganda has already submitted technical and financial bids for the Kampala-Malaba line, Kenya is also considering proposals from the UAE. The UAE has shown interest in improving the Port of Mombasa,
and the deal could potentially tie Kenya down with political implications, similar to the controversial Dubai deal with Dar es Salaam.

The project, which aims to connect the Port of Mombasa to Kampala, Kigali, and Juba, has faced challenges in the past due to financing issues. However, both countries seem determined to complete the SGR and secure funding from a mix of lenders, including UK Export Finance (UKEF), European, Chinese, and Middle East-based institutions.

The project is crucial for Uganda to improve its connectivity with neighboring countries and enhance economic viability. The upcoming months are critical for securing the necessary financing to ensure the project's success. If all goes well, the SGR is expected to boost rail revenues, aid loan repayments, and foster economic growth in the region.

As Kenya plans to link Mombasa and Lamu ports with a modern railway line by June 2027, the successful completion of the SGR will be a significant milestone in East Africa's transportation sector. Amidst stiff competition from Dar es Salaam port in Tanzania, the increased usage of rail to haul Uganda's cargo through the SGR will be vital for Kenya's financial stability.