Rwanda to Spend U.S.$1.3 Billion on Railway Project

Rwanda is looking for $1.3 billion to finance its portion of the Isaka-Kigali Standard Gauge Railway (SGR) aimed at reducing logistics costs, boost trade and ease the movement of people.

Lowering the cost of transporting goods is critical for Rwanda in its bid to balance its trade with other countries. Clever Gatete, the Minister of Infrastructure met his Tanzanian counterpart, Isack Kamwelwe, in Kigali on Tuesday to discuss the available funding options for the project.

“We are being supported by the African Development Bank (AfDB) in terms of technical capacity on how to structure the financing arrangement for the investment because this is not cheap and that is why it is taking long,” Gatete said.

Care is being taken in the initial stages, to make sure that “once we start, we don’t stop.” Specifically, Rwanda is looking for $1.3 billion, Gatete said, to construct the 130 kilometres on its side.

Kamwelwe said: “Rwandans and Tanzanians must rest assured that the two governments are doing everything to make sure that this project is implemented,” he said. If it comes to fruition, the project will deliver Rwanda’s first ever railway line.

The ministers deliberated on key implementation issues of the project agreed to continue the bilateral discussion on financing options, and develop a project roadmap incorporating the guidance of the Heads of State. They further directed the Permanent Secretaries responsible for Transport to fast track the ratification of the Bilateral Agreement by February, 2019.

Kamwelwe said the project – which will be implemented in six phases – has actually started, in Tanzania, with the first two underway. Tanzania, he said, are using internal resources for ongoing construction. “We have phase one, 300 kilometres and the progress is at 37%.

Phase two is 422 kilometres from Morogoro to Makutupora,” he said. According to Kamwelwe, it will be important for both countries to carefully strategize on matters such as how they will recoup the money invested.