AfDB Approves $696.4 Million Financing for Burundi-Tanzania Railway

The African Development Bank (AfDB) has approved $696.41 million in financing for Tanzania and Burundi to construct an electric standard gauge railway line.

The central corridor railway, covering 651 kilometers, will connect mineral-rich Burundi with Tanzania’s Dar es Salaam port.

The AfDB is set to provide Tanzania with $597.79 million in loans and guarantees, and Burundi with $98.62 million in grants under the financing package.

The construction project will be divided into three lots in Tanzania, namely Tabora-Kigoma (411km) and Uvinza-Malagarasi (156 km) sections.

The Malagarasi–Musongati section (84km) will be built in Burundi.

The total cost of the project both in Tanzania and Burundi is estimated at nearly $3.93 billion.

“As the Initial Mandate Lead Arranger (IMLA), the Bank will structure and mobilise financing of up to $3.2 billion from commercial banks, development financial institutions, export credit agencies and institutional investors,” AfDB said in a statement.

The infrastructure is part of the joint Tanzania-Burundi-DR Congo SGR project.

The construction of a railway in Burundi will enhance the country’s nickel exploitation, which currently holds the 10th largest world nickel deposit at the Musongati mining fields.

Burundi’s strategic minerals, including lithium and cobalt, are expected to generate substantial revenue through its rail link with Tanzania.

The port of Dar es Salaam currently accounts for 80% of Burundi’s import and export trade.