The Ugandan government has officially appointed Citibank to lead the mobilization of €2.7 billion ($3.19 billion) required for the development of the Standard Gauge Railway (SGR). The announcement, made during the IMF and World Bank Spring Meetings in Washington, marks a pivotal shift in Uganda’s strategy to modernize its transport corridor and unlock the economic potential of the landlocked nation.
This appointment follows years of stalled negotiations and the eventual departure of Chinese financiers, who had previously been the primary hope for the project. After efforts to secure funding from Beijing proved unfruitful, Uganda pivoted in 2024 by awarding the construction contract to the Turkish firm Yapi Merkezi. By engaging Citibank, the Ministry of Finance is signaling a transition toward international commercial debt and export credit agency (ECA) support. A high-level Ugandan delegation met with Richard Hodder, Citibank’s Managing Director and Global Head of Export and Agency Finance, to finalize the roadmap for securing the necessary capital.
The 272-kilometer (169-mile) rail line is designed to connect the capital, Kampala, to the border town of Malaba.From there, it will link seamlessly with Kenya’s existing rail network, providing a direct, high-capacity artery to the Indian Ocean seaport of Mombasa.
The economic implications are profound, as the SGR is expected to slash the cost of moving goods by nearly 40%, making Ugandan exports more competitive on the global market. Furthermore, the project will benefit the wider region, including Rwanda, Burundi, and the Democratic Republic of Congo, while replacing century-old colonial tracks with a high-speed electric system.
In tandem with Citibank’s mobilization efforts, the Ugandan government confirmed it is in advanced talks with the World Bank. While the global lender has historically been cautious regarding large-scale rail debt, officials in Washington confirmed they are considering an “array of potential financing options.”
This multi-pronged approach—combining commercial leadership from Citibank with institutional backing from the World Bank—is intended to de-risk the project for private investors.
While initial preparatory works have commenced using domestic government funding, full-scale construction remains on hold until the €2.7 billion package is fully committed.
The challenge for Citibank will be navigating the current global interest rate environment while ensuring Uganda’s debt-to-GDP ratio remains sustainable. As Yapi Merkezi stands ready to begin heavy engineering, the success of this Citibank-led mandate will determine whether Uganda finally breaks ground on a project that has been a cornerstone of its “Vision 2040” for over a decade.
