AfDB to finance $696m Burundi-Tanzania electric railway
The African Development Bank Group (AfDB) will finance the second phase of the construction of a Joint Tanzania-Burundi-DR Congo Gauge Railways project valued at $696 million.
The Board of Directors of the Bank approved financing facilities for the second phase comprising a 651-kilometre single electrified railway line on Tanzania Burundi stretch, The AfDB reported.
This will be subdivided into three lots: Tabora – Kigoma (411 km) and Uvinza – Malagarasi (156 km) sections in Tanzania; and the Malagarasi –Musongati section (84 km) in Burundi. This standard gauge railway project will be connected to the existing railway network of Tanzania, providing access to the port of Dar es Salaam.
The first phase of the project comprised a total of 400 kilometres of rail infrastructure built in Tanzania from Dar es Salaam to Dodoma. The rest of the section from Dodoma to Tabora is under construction.
The African Development Bank Group will extend $98.62 million in grants to Burundi and $597.79 million in loans and guarantees to Tanzania. In its role as the Initial Mandate Lead Arranger (IMLA), the Bank will structure and mobilize financing amounting to up to $3.2 billion from commercial banks, Development Financial Institutions (DFIs), Export Credit Agencies (ECAs), and institutional investors. The overall project cost, covering both Tanzania and Burundi, is projected to be nearly $3.93 billion.
The establishment of this railway will enable Burundi to enhance the extraction of nickel, as it possesses the 10th largest deposit globally in the Musongati mining fields. Additionally, the country holds resources like lithium and cobalt, which are anticipated to generate substantial revenue through the rail connection with the port of Dar es Salaam, currently handling 80% of the country's import and export trade.
