Uganda’s move to engage Citibank for the structuring of €2.7 billion in railway financing marks a transition from long term planning to active project execution. For the landlocked country, rail infrastructure is central to improving trade efficiency and reducing transport costs. With involvement from the World Bank and Yapi Merkezi positioned for construction, the project is designed to reshape Uganda’s logistics system and strengthen regional connectivity.
Uganda is advancing plans for a 272 kilometre Standard Gauge Railway linking Kampala to Malaba, which will connect to Kenya’s port of Mombasa. Valued at €2.7 billion, the project involves Citibank in arranging financing, potential support from the World Bank, and Yapi Merkezi as the lead construction firm. While preparatory works are ongoing, full construction will depend on the successful closure of financing agreements. After earlier difficulties in negotiations with China, Uganda is now pursuing a broader mix of international funding partners, reflecting the strategic importance of the railway to its economy.
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As a landlocked country, Uganda faces high transport costs and limited competitiveness in regional trade. The Standard Gauge Railway is expected to reduce freight costs by up to 40 percent, improve access to Kenyan and regional ports, and support growth in manufacturing, agro processing, and mining. The project is widely viewed as a structural shift in Uganda’s economic capacity rather than a conventional infrastructure upgrade.
Uganda’s rail sector is undergoing its most significant expansion in decades. The network is projected to grow from 258 kilometres to 768 kilometres by 2029. Annual cargo capacity is expected to rise from 1.5 million tonnes to 5 million tonnes, while passenger traffic could increase from 856,000 to 2.1 million by 2030. Key developments include planned commencement of full Standard Gauge Railway construction in 2026, ongoing rehabilitation of the Tororo–Gulu meter gauge line at 62 percent completion, and proposed extensions toward Tanzania’s Dar es Salaam corridor. This dual strategy of new construction and rehabilitation is intended to maintain continuity in rail services during the transition period.
The economy remains resilient, with GDP estimated between 61.3 billion and 66.1 billion United States dollars in 2025. Growth is projected at around 6.3 percent, with potential to approach 7 percent in the medium term. GDP per capita stands at approximately 1,324 dollars. While the direct contribution of rail to GDP is still emerging, its indirect effects are expected to be significant, including lower business costs, stronger agricultural and industrial exports, improved regional trade, and reduced pressure on road infrastructure. Rail development also forms a core component of Uganda’s National Development Plan IV.
Uganda’s railway history reflects periods of expansion, decline, and renewal. Once a key colonial transport system within the East African Railways network, the system expanded after independence before collapsing in the 1970s amid regional institutional breakdowns. Revival efforts began around 2016, with renewed focus on rebuilding rail infrastructure to support modern economic needs. Today, Uganda aims to position its rail network as a critical component of East African integration by linking Kenya, Rwanda, and the Democratic Republic of the Congo, with potential extensions toward Tanzania’s port of Dar es Salaam.
Despite its promise, the €2.7 billion project faces notable challenges. These include financing complexity relative to national output, risks of implementation delays, coordination requirements with neighbouring countries, institutional capacity constraints, and security concerns such as vandalism of infrastructure. However, the opportunities are substantial, including development of regional trade corridors, industrial zones linked to rail infrastructure, integration with the country’s growing oil sector, adoption of digital logistics systems, and alignment with the African Continental Free Trade Area, which increasingly rewards efficient transport networks.
Uganda’s railway revival represents a strategic effort to overcome the constraints of landlocked geography, high transport costs, and fragmented regional trade. Its success will depend not only on financing but also on effective coordination, institutional discipline, and sustained policy commitment. If implemented successfully, the Standard Gauge Railway could become a key driver of regional integration and long term economic transformation.
