Uganda seeking $8bn China loan for railway construction
Uganda is hoping to secure an $8-billion loan from China to build a railway network to revamp the country’s transport infrastructure as it prepares to start oil production.
China has become a major investor in Uganda, mainly providing cheap loans for roads, hydropower dams, fibre-optic cable networks and other infrastructure.
“This is a huge project and we’ll need cheap money and I don’t think we can get it from anywhere else,” Keith Muhakanizi, permanent secretary, ministry of finance, told Reuters.
Uganda signed a memorandum of understanding with China Harbour Engineering Corporation (CHEC) in late August to start a feasibility study on the new project.
East African leaders and China formally signed agreements in May related to the construction of a new multi-billion dollar standard gauge railway the port of Mombasa to Nairobi and on to neighbouring states, including Uganda.
Uganda hopes China can fund the portion of the railway line from its border with Kenya to its capital Kampala, and north to the border with South Sudan as well as the oil-rich West Nile region that borders Democratic Republic of Congo.
Uganda plans to start pumping its crude, estimated at 6.5 billion barrels in reserves in 2017, and requires railways to transport heavy drilling equipment.