IsDB Approves Record €650.75 Million Financing for Uganda’s Standard Gauge Railway

By Watchdog Uganda Reporter

KAMPALA, Uganda | June 20, 2026

The Islamic Development Bank (IsDB) has approved a landmark financing package worth €650.75 million (approximately Shs2.6 trillion) for Uganda’s flagship Standard Gauge Railway (SGR) project, marking the largest single-project financing commitment the Bank has ever extended to the country.

The funding was approved during the 51st IsDB Group Board of Governors’ Annual Meetings, held in Baku, Azerbaijan, from June 16 to 19, 2026, under the theme “Regional Integration for Sustainable Prosperity.”

According to the Ministry of Finance, Planning and Economic Development, the financing will support construction of critical infrastructure along the Malaba–Kampala Standard Gauge Railway corridor, a key component of Uganda’s long-term transport modernization strategy.

Infrastructure to Be Financed

The approved package will finance several major components of the railway project, including:

• Construction of the 553-metre Jinja Nile Railway Bridge;
• Development of the 2.12-kilometre Mbuya–Kampala railway tunnel;
• Construction of six railway stations in Tororo, Iganga, Jinja, Lugazi, Kampala East, and Kampala City; and
• Establishment of three locomotive maintenance workshops in Kampala East, Jinja, and Tororo.

The Permanent Secretary and Secretary to the Treasury, Dr. Ramathan Ggoobi, who represented Uganda as Temporary Governor at the annual meetings, said government remains committed to achieving full financial closure for the SGR project by November 2026.

Expanding Development Partnership

Before the latest approval, Uganda’s active IsDB portfolio comprised eight public sector operations worth USD 896.55 million as of May 2026, with the Integrated Transport Infrastructure Services Programme accounting for USD 721 million.

Beyond the SGR, IsDB financing has supported several strategic infrastructure projects across Uganda, including:

• The Muyembe–Nakapiripirit, Rwenkunye–Apac–Lira–Acholibur, and Kumi–Ngora–Serere–Kagwara road projects;
• Construction of the Masindi Port Bridge and irrigation schemes;
• Technical and vocational education programmes; and
• Regional cancer treatment centres in Arua and Mbale.

Call for Innovative Development Financing

Speaking during the Governors’ Round Table in Baku, Dr. Ggoobi welcomed the Bank’s newly launched IsDB Concessional Fund (ICF), which seeks to increase concessional financing to approximately 15 percent of the institution’s annual approvals.

He noted that innovative financing mechanisms are becoming increasingly important as traditional sources of development assistance continue to decline.

“Given the structural shifts in the global financial architecture, there is an urgent need for Multilateral Development Finance Institutions like the IsDB to reform. They must become more inclusive, adaptive and responsive to the unique needs of member countries,” Dr. Ggoobi said.

Expected Economic Impact

The Standard Gauge Railway is expected to significantly transform Uganda’s transport sector by lowering freight transport costs, improving trade connectivity with Kenya and the wider East African Community, enhancing cargo efficiency and safety, reducing carbon emissions, and creating thousands of employment opportunities during construction and operation.

The project forms part of Uganda’s broader strategy to modernize transport infrastructure and strengthen regional trade integration.