The OPEC Fund for International Development is assessing a €150 million financing package for Uganda's Standard Gauge Railway, with approval targeted by November 30, 2026. A team from the fund arrived in Uganda over the weekend and is scheduled to meet government ministries and agencies before inspecting the Malaba-Kampala railway corridor. Kemi Afun-Ogidan, the OPEC Fund's Senior Country Manager, said the appraisal will examine the project's designs, implementation arrangements, disbursement schedule and environmental and social safeguards before recommendations go to the fund's Board. If approved, this would be the OPEC Fund's largest financing to Uganda since 1976.
The proposed €150 million contribution adds to funding already secured for the €2.7 billion railway project. The Islamic Development Bank approved €650 million in June 2026, while the Ugandan government is expected to contribute approximately 15 per cent of total costs through a €405 million Sukuk bond, an Islamic financing instrument. Export credit agencies are providing up to 60 per cent of project costs and development financing institutions about 25 per cent. The railway is intended to improve freight transport between Uganda and the Kenyan port of Mombasa.
SGR Project Coordinator Can. Eng. Perez Wamburu said high freight costs and unpredictable delivery schedules currently undermine the competitiveness of Ugandan businesses. The project is targeting a reduction in freight costs from US$0.14 per tonne-kilometre today to about US$0.07, and freight transit time from 8.5 days to one day. The railway is also expected to support industrialisation, agricultural exports, employment creation and skills development while reducing pressure on roads.
Land acquisition for the corridor, which traverses 12 districts and two cities, has progressed to 70 per cent. Land acquisition entered its final three districts, Mukono, Wakiso and Kampala, in November 2025, with compensation still ongoing. Contractor Yapi Merkezi has largely completed preliminary works financed by the government to €75 million, including establishing a railway sleeper factory, concrete batching plant, materials laboratory and workers' dormitories in Iganga District. The government signed a construction contract with Yapi Merkezi on October 14, 2024, before officially launching the project in Tororo District on November 21, 2024.
The project has a planned implementation period of 48 months from commencement, with the start currently targeted for January 2027, subject to financing completion. The OPEC Fund appraisal is a key step towards securing the additional resources needed as the government works to complete its financing arrangements and move into full construction.