Uganda has revised its funding approach for the $3.19 billion standard gauge railway (SGR) project, with the United States now emerging as the leading prospective financing partner after China stepped away from the arrangement, officials familiar with the matter have said.
This development represents a significant shift in the country’s infrastructure funding direction, moving away from earlier China-linked plans that ultimately stalled.
In 2015, the Ugandan government awarded the railway construction contract to China Harbour Engineering Company (CHEC), with the expectation that it would secure financing from the Chinese government. However, repeated delays and unmet conditions led to the cancellation of the agreement in January 2023.
Ramathan Ggoobi, permanent secretary at Uganda’s Ministry of Finance, disclosed that Citibank will serve as the lead arranger responsible for structuring and coordinating funding for the railway project.
He made the comments during a meeting of finance ministers from Uganda, Kenya, and Rwanda held in Washington on the sidelines of the 2026 IMF and World Bank Spring Meetings.
Uganda has additionally engaged the World Bank in discussions to help support the project, which is expected to enhance regional transport links, lower freight expenses, and improve trade competitiveness across East Africa.
Uganda expands Western financing engagement
Uganda has also entered parallel negotiations with the World Bank, as part of its broader infrastructure agenda aimed at improving logistics efficiency and strengthening trade flows within the East African region.
The railway initiative was revived in October 2024 after Uganda signed a fresh construction agreement with Turkish contractor Yapi Merkezi to build the line linking Kampala to Malaba on the Kenyan border.
Once completed, the railway will connect Uganda to Kenya’s rail system and ultimately to the port of Mombasa on the Indian Ocean coast.
Reports from Reuters indicate that the World Bank recently confirmed it is evaluating “an array of potential financing options” for the project.
A Ugandan delegation in Washington also held talks with Citibank officials led by Richard Hodder, managing director and global head of export and agency finance, to review progress on mobilising funds for the SGR project, according to Reuters.
Looking ahead, Uganda, Kenya, and Rwanda plan to extend the railway corridor further into South Sudan, Rwanda, and the Democratic Republic of Congo, with the goal of establishing a wider regional network to strengthen trade integration across East and Central Africa.