The Ugandan government has announced that it has secured a historic €650.75 million (approximately Shs2.6 trillion) in financing from the Islamic Development Bank (IsDB) to construct the Standard Gauge Railway (SGR) project, which is expected to significantly modernize the country’s transport infrastructure. This financial approval marks the largest single-project funding ever approved by the bank for Uganda. This historic milestone was reached during discussions held on the sidelines of the 51st IsDB Group Board of Governors’ Annual Meetings, which took place in Baku, Azerbaijan, from June 16 to 19, 2026, under the theme, “Regional Integration for Sustainable Prosperity.”
Dr. Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST) of the Ugandan Ministry of Finance, who led the Ugandan delegation as Temporary Governor, affirmed the government’s commitment to achieving full financial closure for this multi-billion-shilling railway project by November 2026. The Standard Gauge Railway project is a strategic flagship national venture aimed at modernizing Uganda’s transport system, drastically reducing freight costs, and improving regional trade links with neighboring East African countries.
According to official details, the new funding from the bank will directly target critical and complex infrastructural nodes along the railway network. Specifically, the funds will finance the construction of the 553-meter Jinja Nile Bridge, the 2.12-kilometer Mbuya-Kampala underground tunnel, and six major railway stations including Tororo, Iganga, Jinja, Lugazi, Kampala East, and Kampala City. Additionally, the financing will cover the construction of three major mechanical workshops to be built in Kampala East, Jinja, and Tororo.
By the end of May 2026, Uganda and the IsDB maintained eight active public operations, including loans and grants, valued at a total of $896.55 million, heavily dominated by the Integrated Transport Infrastructure Services Program. Beyond this railway project, the bank has active engagements across various crucial sectors in Uganda, including the upgrading of several national roads such as the Muyembe-Nakapiripirit and Rwenkunye-Apac-Lara-Acholibur routes, as well as the construction of the Masindi Port Bridge. Furthermore, the bank supports large-scale irrigation schemes in the Unyama, Namalu, and Sippi areas, the expansion of vocational education, and the establishment of regional oncology centers in Arua and Mbale cities.
Speaking at the Governors’ Round Table, Dr. Ggoobi commended the bank for launching the IsDB Concessional Fund in 2026, which aims to boost concessional financing to 15 percent of annual approvals, bridging the gap between rising global debt and sustainable development. He noted that this fund is crucial because traditional foreign aid flows have been declining significantly in both volume and reliability, widening the financing gap.
