Uganda is moving into the final stages of launching its first-ever sovereign sukuk to fund a massive regional railway expansion.
The finance ministry confirmed Tuesday that the Islamic bonds will cover 15% of the €2.7 billion ($3.17 billion) project cost.
This Sharia-compliant instrument marks a significant pivot toward innovative financing to diversify the nation’s growing public debt portfolio.
The Standard Gauge Railway aims to modernize trade by connecting landlocked Kampala directly to the Kenyan border at Malaba.
Beyond the sukuk, export credit agencies will provide 60% of the funds, while development finance institutions cover the rest.
Deputy Treasury Secretary Patrick Ocailap is currently leading a regional roadshow through Kenya and Tanzania to attract local investors.
The delegation includes experts from Stanbic Bank and the central bank to ensure precise price discovery before the issuance.
This ambitious 272-kilometer line is expected to slash regional freight costs and accelerate transit times to the Indian Ocean.
Construction has been handed to Turkish firm Yapi Merkezi following the cancellation of previous agreements with Chinese state contractors.
The railway serves as a vital artery in the East African corridor, potentially extending to Rwanda and the Congo.
Uganda’s bold entry into the Islamic finance market signals a new dawn for large-scale infrastructure development across the continent.