A team from the Vienna-based lender is assessing Uganda’s Standard Gauge Railway project, with a planned Board decision by November 30, following the Islamic Development Bank’s approval of €650 million in June.
A team from the OPEC Fund for International Development has arrived in Uganda to assess a proposed €150 million (Shs697 billion) financing package for the country’s Standard Gauge Railway (SGR), with approval targeted by the end of November 2026.
The team arrived over the weekend and is scheduled to meet government ministries and agencies involved in the project before inspecting the Malaba-Kampala railway corridor later this week.
Kemi Afun-Ogidan, the OPEC Fund’s Senior Country Manager, said the appraisal will examine the project’s designs, implementation arrangements, disbursement schedule and environmental and social safeguards before recommendations are submitted to the fund’s Board.
Speaking during an entry meeting with the SGR project management team at the project’s headquarters on Monday, October 19, Afun-Ogidan said the fund was working towards securing Board approval by November 30.
“We are targeting Board approval by November 30, 2026. If approved, this will be our largest financing to Uganda since 1976 when we started here. So, we do not have a lot of time,” she said.
The proposed financing would add to funding secured for the €2.7 billion railway project, which is intended to improve freight transport between Uganda and the Kenyan port of Mombasa.
In June 2026, the Islamic Development Bank approved €650 million for the project, while the proposed OPEC Fund contribution would provide additional financing towards its implementation.
The SGR’s financing framework provides for export credit agencies to contribute up to 60% of the project cost, development financing institutions about 25%, and the Ugandan government approximately 15%.
The government’s contribution is expected to be mobilised through a €405 million Sukuk bond, an Islamic financing instrument structured to comply with Islamic finance principles.
The railway is expected to lower cargo transportation costs and shorten delivery times, addressing longstanding challenges associated with moving goods between Uganda and regional and international markets.
SGR Project Coordinator Can. Eng. Perez Wamburu said high freight costs and unpredictable delivery schedules increase production expenses and undermine the competitiveness of Ugandan businesses.
“The project is targeting reducing freight-cost from US$0.14 per tonne-kilometre today to about $0.07, and freight transit time from 8.5 days to one day,” Wamburu said.
The project is also expected to support industrialisation, agricultural exports, employment creation and skills development while reducing pressure on roads.
Land acquisition and construction preparations
The project has acquired close to 70% of the land required along the Malaba-Kampala corridor, which traverses 12 districts and two cities.
Land acquisition entered its final three districts — Mukono, Wakiso and Kampala — in November 2025, with compensation still ongoing in the affected areas.
Meanwhile, contractor Yapi Merkezi has largely completed preliminary works under a Limited Notice to Proceed arrangement financed by the government to the tune of €75 million.
The initial works include establishing a railway sleeper factory, a concrete batching plant, a materials laboratory and workers’ dormitories, as well as completing geotechnical studies.
The facilities are located at the project’s camp in Iganga District and are intended to support subsequent construction activities.
The government signed a construction contract with Yapi Merkezi on October 14, 2024, before officially launching the project in Tororo District on November 21, 2024.
The project has a planned implementation period of 48 months from commencement, subject to the conclusion of financing. The start of the implementation period is currently targeted for January 2027.
The OPEC Fund appraisal is therefore a key step towards securing additional resources for the project as the government works to complete its financing arrangements and move into full construction.