DAR ES SALAAM: Tanzania has secured a $1.277 billion financing package to accelerate expansion of its flagship Standard Gauge Railway (SGR), a mega infrastructure project expected to strengthen the country’s position as a major trade and logistics gateway linking the Indian Ocean to landlocked markets across East and Central Africa.
The financing agreement, backed by institutions from Sweden, Italy and Poland, will fund construction of two critical railway sections — the Makutupora–Tabora segment and the Tabora–Isaka line — as Tanzania pushes ahead with one of Africa’s largest transport infrastructure projects.
The railway forms part of the strategically important Central Corridor trade network connecting the Port of Dar es Salaam with inland economies including Democratic Republic of the Congo, Burundi, Rwanda and Uganda.
Officials say the project is central to Tanzania’s long-term ambition of transforming itself into a regional transport and logistics hub capable of competing with rival trade corridors in East Africa.
Speaking during the signing ceremony in Dodoma, Transport Minister Makame Mbarawa described the railway as one of the region’s most strategically important infrastructure investments.
“Tanzania is implementing one of the region’s most strategic infrastructure investments,” Mbarawa said, noting that more than 2,100 kilometres of railway are currently under construction out of a planned 4,752-kilometre national network.
Across Africa, governments are increasingly investing in modern rail systems as part of broader efforts to reduce transport costs, strengthen regional integration and shift freight transport from heavily congested roads to more efficient and environmentally sustainable rail networks.
Tanzania says early results from completed sections of the SGR already point to significant economic and environmental benefits.
According to government figures, the operational Dar es Salaam–Dodoma route has transported nearly six million passengers and approximately 120,000 tonnes of cargo since operations began.
Officials say the shift from road transport to electrified rail systems has reduced fuel consumption by an estimated 17 million litres while cutting carbon emissions by more than 50 percent.
The electric-powered railway, designed for speeds of up to 160 kilometres per hour, is expected to significantly reduce cargo transit times between Tanzania’s ports and inland markets, improving efficiency for regional trade flows.
Direct SGR cargo link to ease pressure at Dar es Salaam Port
Finance Minister Khamis Mussa Omar said the railway’s economic impact would extend beyond transport by stimulating growth in sectors including agriculture, mining, tourism and logistics across the regions connected by the line.
“SGR is not only for Tanzania but for the entire region,” Omar said. “This integration will stimulate broader economic growth.”
Officials also said Tanzania is working with the World Bank to identify investment and economic opportunities emerging along the railway corridor as part of wider plans to develop industrial and commercial activity around transport infrastructure.
The financing agreement also reflects growing European involvement in African infrastructure development as international powers intensify competition for influence in strategic transport and trade projects across the continent.
Charlotta Ozaki Macias said companies linked to Sweden have already secured major contracts connected to railway signalling systems and advanced rail technologies.
She said the project would also contribute to climate goals by reducing road congestion, lowering transport emissions and improving road safety.
Tanzania’s SGR project is designed to replace the country’s ageing colonial-era metre-gauge railway system with a modern electrified network capable of handling heavier cargo volumes and faster passenger transport.
Once completed, the railway is expected to connect the Indian Ocean port of Dar es Salaam to Mwanza on the shores of Lake Victoria, with future extensions planned into neighbouring countries.
Regional trade analysts say the project could significantly reshape trade patterns across East and Central Africa by giving landlocked economies improved access to international shipping routes through Tanzania’s ports.
As competition intensifies among African trade corridors seeking to capture growing regional commerce, Tanzania’s railway expansion is increasingly being viewed as a transformative project that could redefine transport, logistics and economic integration across a large part of the continent.