Uganda Appoints Citibank As Lead Arranger for Financing $3B Rail Project
On 16 April 2026, during the IMF/WB Spring Meetings in Washington DC, Uganda’s Ministry of Finance announced that it had appointed Citibank to mobilize the finance for the Standard Gauge Railway (SGR) estimated at USD 3.2 billion. The Project consists of a 272-kilometer railway line running from the capital Kampala to the town of Malaba, on the border with Kenya.
Previously, Uganda had already signed a agreement with China Harbor Engineering Company (CHEC) back in 2015. After nearly a decade of talks, the China EXIM Bank did not approve the financing and the agreement with CHEC was terminated on January 2023.
The Ugandan delegation had a working session with the World Bank to explore an array of financing options. In line with its development mandate, the WB could provide a concessional loan to the Government of Uganda. Alternatively, the WB could provide technical assistance to secure blended and sustainable finance, to be arranged by Citibank, that could combine the Bank’s funds and private capital.
In addition, Uganda could access the financing through the WB’s Development Policy Operation (DPO) framework that disburses funds once macroeconomic fundamentals are met and certain prescribed structural reforms are achieved.
Generally speaking, the reforms tend to focus on fiscal responsibility, enhancing private sector participation, and reinforcing climate resilience. In the case of Uganda, the IMF has recommended reforms to policies governing the agro-industry and transport sectors to ensure that the rail is economically viable once completed. Moreover, the WB is advocating moving heavy cargo onto rail, leaving roads for light cargo and passengers.
Another important condition for the financing of the project is the synchronization of the completion of the extension of the SCR on the Kenyan side from Naivasha to the Malaba border post. That would create a seamless rail link from landlocked Uganda to the Mombasa port on the Indian Ocean.
To that effect, Uganda and Kenya have had extensive discussions to coordinate their construction plans and timelines and a bilateral MoU was inked in 2025. In March 2026, Uganda President Museveni and Kenyan President Ruto met in Kisumu to officially kick off the 107-km segment from Kisumu to Malaba.
Construction is projected to take four years. Both sides are targeting a completion date toward the end of 2028 with a connection at the Malaba One-Stop Border Post (OSBP).
When completed, the rail will contribute greatly to reduce road congestion. The transit time from Kampala to Nairobi will be slashed from 14 hours to just 4 hours. Freight costs will be reduced by an estimated 40%, compared to road transport. Eventually, Malaba will develop into a hub, linking into Rwanda, South Sudan, and the Democratic Republic of Congo.