November 4, 2026 - The United Republic of Tanzania has signed a $1.2 billion commercial financing facility for the Tabora–Kigoma section of its Standard Gauge Railway (SGR), also known as Lot 6.
The African Development Bank (AfDB), acting as the Initial Mandated Lead Arranger (MLA), structured and arranged an $800 million Partial Credit Guarantee (PCG), the largest guarantee of its kind issued by the Bank to date.
Tanzania mandated the Bank to structure and mobilise up to $3.2 billion to support the development of its regional railway network through the Standard Gauge Railway Project. Delivering this ambitious project required a financing approach capable of attracting capital from multiple investor classes.
A key priority was to align the financing requirements and risk appetites of various institutions within a unified financing structure to support this strategic infrastructure investment, while taking into account the country's other debt obligations and geopolitical developments that influenced interest rates.
The transaction combines the Bank's expertise in the transport sector with its financial structuring and guarantee capabilities to advance the development of the Central Corridor as a productive regional economic corridor.
The Bank mobilised a nine-bank syndicate for the $1.2 billion commercial facility, which was co-arranged by Deutsche Bank and Société Générale. Other lenders include HSBC, Commerzbank, Nedbank, Stanbic Bank Tanzania, First Abu Dhabi Bank, FirstBank UK and Bank of Africa United Kingdom.
The lenders' commitments comprise $720 million in guaranteed lending and $480 million in lending based on clean sovereign risk.
The signed $1.2 billion facility forms part of an overall $2.3 billion financing package. In addition to the commercial tranche, the package comprises an Export Credit Agency (ECA) tranche and a further tranche to be mobilised in collaboration with a co-guarantor, all falling within the Bank's broader mobilisation mandate.
The transaction demonstrates blended finance in practice. At the centre of the commercial tranche is an AfDB Partial Credit Guarantee of up to $800 million, priced on non-market terms and covering the principal of the guaranteed tranche, together with two years of interest.
The AfDB remains the Guarantor of Record, while credit insurance arranged by insurance broker Texel distributes $405.5 million of exposure among a panel of international insurers, including Lloyd's syndicates.
This arrangement brings additional private-sector risk-bearing capacity into the transaction, strengthening the guarantee structure and enabling the mobilisation of greater commercial financing for Tanzania's railway development.
The financing will support the construction of the 411-kilometre electrified Tabora–Kigoma railway line, known as Lot 6, which is a strategic link in Tanzania's railway network.
For Tanzania, the investment is expected to support the development of western regions by providing a high-capacity, long-haul transport link for production and trade.
Farmers, mining operators and the general population are expected to benefit from more efficient transportation, lower transport costs and employment opportunities during the construction and operational phases.
Connected to Tanzania's wider railway network and the Port of Dar es Salaam, the line will also facilitate trade with the Democratic Republic of Congo (DRC) across Lake Tanganyika through the ports of Kigoma and Kalemie. Meanwhile, the wider regional railway programme is expected to strengthen connectivity with Burundi and further into eastern DRC.
“By combining development finance, commercial lending and insurance capacity, we have successfully unlocked the scale of financing required to deliver this type of transformational regional infrastructure. It reflects the vision behind the New African Financial Architecture for Development (NAFAD), focusing on private capital mobilisation and partnerships in risk-sharing to mobilise resources at scale,” said Max Ndiaye, Senior Director, African Development Bank Group.
“The strategic value of this railway lies in the productive investment it can unlock along the Central Corridor. By connecting agricultural and mineral production areas, industrial centres and markets, the investment can strengthen regional value chains and expand opportunities for businesses and communities. Our ambition is to translate this landmark financing into a corridor that supports competitive industries, creates jobs and deepens regional integration,” said Mike Salawou, Director of the African Development Bank's Infrastructure and Urban Development Department.
The transaction advances the African Development Bank Group's Ten-Year Strategy 2024–2033 and its Four Cardinal Points, particularly its priorities of unlocking Africa's capital and building resilient infrastructure and competitive value chains.
By mobilising commercial financing for a regional transport corridor, the transaction translates the Bank's capital mobilisation mandate into tangible support for trade, industrial development and regional integration.
It also demonstrates how the Bank leverages its infrastructure expertise and financing capabilities to strengthen regional competitiveness and generate sustainable economic opportunities.
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