Bank seeks finance for Dar es Salaam rail project

THE African Development Bank will hold an investors’ road show to attract as much as $7.6bn in financing for a railway line linking Tanzania’s port in Dar es Salaam with neighbouring landlocked countries.

The lender is teaming up with the World Economic Forum to help find investors to bankroll the 2,200km line, according to Gabriel Negatu, the bank’s regional director for East Africa.

“We are convening a meeting of would-be investors to see how best to finance the line,” Negatu said.

“Everyone who can come up with financing, we will recommend them to the Tanzania government.”

The planned standard gauge line is “credit positive” and once operational may cement Tanzania’s position as a logistics hub for eastern Africa, Moody’s Investors Service said on September 15.

While President John Magufuli’s government said it would become a major trade artery between Tanzania and its neighbours, research firms such as NKC African Economics said there was uncertainty about whether regional demand will justify both Kenya and Tanzania operating similar rail networks.

The Tanzania line will run from Dar es Salaam to Rwanda’s capital Kigali. Two other lines will branch off to Musongati in Burundi and to Mwanza port on the shores of Lake Victoria to service Ugandan shippers.

The line to Kigali is expected to ultimately connect to the eastern Democratic Republic of the Congo.

Export-Import Bank China may lend Tanzania $7.6bn to finance the railway, the government said in July. Chinese investors will be among those invited to the financing road show, Negatu said.

“If they finance it completely, no one will be happier than us,” he said.

“If China comes up with that money, I will kiss their hands.”

The banks wants to cofinance the project, with a strategy to “catalyse financing” and encourage other investors to come on board, he said.