The Islamic Development Bank has approved a €650.7 million loan to Uganda to support construction of the country’s standard gauge railway, the Finance Ministry said.
The loan, worth about $746.2 million, was approved by the bank’s executive board and will help finance one of Uganda’s most important infrastructure projects.
Uganda is seeking funding for the €2.7 billion railway, which has already secured support from major lenders including the World Bank and the African Development Bank. The government has also appointed Citibank to help raise additional financing.
Construction of the railway began in 2024 and is being carried out by Turkish company Yapi Merkezi.
The project is designed to connect landlocked Uganda to Kenya’s rail network, giving the country easier access to the Indian Ocean port of Mombasa, a key route for most of Uganda’s imports.
The planned 272-kilometre line is expected to improve regional trade, reduce transport costs and strengthen Uganda’s links to East African markets.
The Islamic Development Bank is already one of Uganda’s largest sources of external financing. Government data shows the bank had projects in the country worth $896.5 million by the end of May.
The railway is part of a broader push by East African states to modernise transport links and improve cargo movement from the coast to inland economies.