NAIROBI, Kenya, Feb 14 – The government of Tanzania has received a Sh147 billion loan from Standard Chartered Bank Tanzania to fund the construction of the Standard Gauge Railway (SGR) project.
Tanzania’s Finance and Planning Minister Philip Mpango said the funds will be used to construct a 550 kilometer long railway connecting Dodoma to Dar es Salaam via Morogoro and Makutupora.
“Once complete, the SGR Rail project will provide a safe and reliable means for efficiently transporting people and cargo to and from the existing Dar es Salaam Port,” Mpango said.
The Tanzanian government expects the railway to address current congestion challenges and decrease freight service charges by 40 percent.
It will also haul up to 10,000 tons of freight, equivalent to 500 lorries, per trip.
Tanzania expects the SGR to connect the country to the neighboring nations of Burundi, Rwanda and The Democratic Republic of Congo, DRC, thereby playing a key role in enhancing regional trade.
According to the Tanzanian government, 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(‘s) from the Export Credit Agencies of Denmark and Sweden.
Sunil Kaushal, Regional CEO, Standard Chartered Africa and the Middle East said the deal signified the benefit of our unrivalled network capabilities into the region.
“There is considerable appetite from the global investment community into Africa, with 80 percent of our top Corporate & Institutional clients using our Africa and Middle East network. For Standard Chartered, Africa remains a priority for our business and clients, and we are proud to be able to use our expertise to support the Government of Tanzania with the finance needed for the SGR project.”