AFRICA · TANZANIA
Tanzania has signed a US$1.2 billion commercial loan for a 411-kilometre electrified railway from Tabora to Kigoma, two towns in western Tanzania, the African Development Bank (AfDB, a multilateral lender based in Abidjan) announced on Wednesday 4 November. The line is meant to carry cargo between the port of Dar es Salaam and Lake Tanganyika.
The loan is one piece of a US$2.3 billion package for Tanzania’s Standard Gauge Railway (SGR), a modern electrified line with wider track than the old metre-gauge. Tanzania has asked AfDB to structure and raise up to US$3.2 billion for the wider regional railway programme.
The Democratic Republic of Congo (DRC) is a mining country where the United States also backs a rail route to the sea. Tanzania’s line adds a second option for cargo from the east.
Key Facts
- Who Tanzania signed the loan, and AfDB, a lender based in Abidjan, arranged it.
- What US$1.2 billion for the 411-kilometre Tabora to Kigoma railway, known as Lot 6, one section of the new railway.
- Why The line links Dar es Salaam port to Lake Tanganyika and the Democratic Republic of Congo (DRC).
- Guarantee AfDB’s US$800 million guarantee, a pledge to repay lenders if Tanzania cannot, is its largest yet.
- Unknown Builders, interest rate, loan term and completion date have not been announced.
In Plain English
- SGR Standard Gauge Railway, Tanzania’s new electrified line with wider track than the old one.
- ECA an export credit agency, a state-backed lender that finances a country’s exports.
- PCG a partial credit guarantee, a promise to repay lenders part of a loan if the borrower cannot.
- Lloyd’s the London insurance market, where groups of insurers called syndicates share risk.
What Tanzania Signed
Tanzania signed a US$1.2 billion commercial financing facility for Lot 6, the Tabora to Kigoma section of its SGR, AfDB said. The bank gives the length of the electrified line as 411 kilometres, although other public figures give 506 kilometres, which includes about 95 kilometres of loops and sidings.
The package also includes a tranche from an export credit agency (ECA, a state-backed export lender) and a further tranche to be raised with a co-guarantor, a second institution that shares the repayment promise. AfDB first announced a US$1.2 billion syndication plan for the SGR in December 2024.
Tanzania has mandated AfDB to structure and mobilise up to US$3.2 billion for the wider programme. Syndication means spreading one loan across several banks.
How the Guarantee Works
AfDB, as Initial Mandated Lead Arranger (the bank that assembles the lending group), arranged a Partial Credit Guarantee (PCG) of US$800 million, its largest to date. The PCG is not priced at market rates and covers the principal of the covered tranche plus two years of interest.
AfDB remains Guarantor of Record, the party legally standing behind the guarantee. Texel, an insurance broker, arranged credit insurance that spreads US$405.5 million of exposure to international insurers, including syndicates at Lloyd’s, the London insurance market.
Max Ndiaye, Senior Director at the AfDB Group, said the deal unlocked the scale of financing required for the project. He said it reflects the New African Financial Architecture for Development (NAFAD).
Nine Banks Share the Lending
A nine-bank syndicate is co-arranged by Deutsche Bank and Société Générale. It also includes HSBC, Commerzbank, Nedbank (a South African bank), Stanbic Bank Tanzania (a local arm of South Africa’s Standard Bank group), First Abu Dhabi Bank, FirstBank UK and Bank of Africa United Kingdom.
Commitments are US$720 million of guaranteed lending and US$480 million of lending on a clean-risk basis to the sovereign, meaning with no guarantee. Together they make up the US$1.2 billion facility.
A Route to Lake Tanganyika
The line connects to Tanzania’s wider rail network and the port of Dar es Salaam. AfDB expects it to support trade with the DRC through the Kigoma and Kalemie (a DRC port town) ports on Lake Tanganyika, a large lake that borders both countries.
The wider programme will link to Burundi and eastern DRC. Our earlier report on the Dar es Salaam port rail target of 1,500 containers a day covers the port end of this route.
Mike Salawou, Director of AfDB’s Infrastructure and Urban Development Department, said the bank wants the financing to become a corridor that supports competitive industries, creates jobs and deepens regional integration. That is a stated goal, not a promise of completion.
What This Means for US Readers
The Lobito Corridor, a US-backed rail route from Angola’s Lobito port to mining areas in the DRC and Zambia, is a separate route to the sea. Tanzania’s line would serve eastern DRC from the Indian Ocean side.
Whether this line wins any of that cargo depends on construction and pricing that are not yet public. AfDB’s announcement gives no traffic forecast.
For readers who follow African debt, the structure is the story. A guarantee, insurance cover and a US$480 million unguaranteed slice sit side by side in one loan.
What Is Not Known
AfDB did not state who will build the line, the interest rate or the loan’s tenor, meaning how many years it runs. It also gave no completion date and did not say how much of the package has been drawn.
Readers should watch for the naming of contractors and the closing of the remaining tranches. Until then, the signing is a financing milestone rather than a construction one.
Frequently Asked Questions
How much is Tanzania borrowing for the railway?
A US$1.2 billion commercial loan for Lot 6, part of a US$2.3 billion package. AfDB is mandated to raise up to US$3.2 billion for the wider programme.
Which railway is being financed?
Lot 6 of the Standard Gauge Railway, the Tabora to Kigoma section. AfDB gives its length as 411 kilometres.
What is the African Development Bank’s role?
AfDB arranged the loan and a US$800 million Partial Credit Guarantee, its largest to date. It remains Guarantor of Record.
Why does it matter to the United States?
The United States backs the Lobito Corridor, a separate rail route to the sea for DRC and Zambian mines. Tanzania’s line would serve eastern DRC from the Indian Ocean side.
Sources: African Development Bank announcement on the Tanzania SGR Lot 6 financing, 4 November 2026 (afdb.org).
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