Uganda has formalised an $800 million financing agreement with the Islamic Development Bank to support a suite of infrastructure projects aimed at bolstering the country’s trade capabilities and economic integration within East Africa. The agreement, signed during the IsDB’s annual meeting in Algiers, encompasses investments in railway development, health, transport, and energy sectors.
A significant portion of the funding is earmarked for the development of a railway line intended to connect Uganda to Kenya’s Standard Gauge Railway , facilitating access to the Indian Ocean port of Mombasa. This strategic linkage is expected to streamline trade routes, reduce transportation costs, and enhance the movement of goods across the region.
The railway project aligns with Uganda’s broader infrastructure development goals, which include the rehabilitation of existing railway lines and the construction of new ones to improve domestic and regional connectivity. The African Development Bank has also committed $301 million to refurbish Uganda’s meter-gauge railway, further supporting the country’s transportation infrastructure.
In addition to the railway initiative, the IsDB financing will support projects in the health sector, aiming to improve healthcare delivery and access. Investments in the transport sector will focus on upgrading road networks, including the construction of bridges and the maintenance of critical roadways, to facilitate smoother and more efficient movement within the country.
The energy sector will also benefit from the funding, with projects designed to enhance energy production and distribution, thereby supporting industrial growth and improving access to electricity for communities across Uganda.
The agreement was signed by Ramathan Ggoobi, Uganda’s Permanent Secretary and Secretary to the Treasury, and Rami Ahmed, Vice President of the IsDB. This partnership underscores Uganda’s commitment to diversifying its sources of external financing and strengthening its economic infrastructure.
Uganda’s collaboration with the IsDB is part of a broader strategy to attract investment from a variety of international partners, particularly in light of challenges in securing funding from traditional sources. The World Bank, for instance, has suspended new loans to Uganda following the enactment of controversial legislation, prompting the country to seek alternative financing avenues.
The IsDB has previously provided financial support to Uganda, including a $295 million loan signed in April 2024 for road construction projects. This earlier agreement funded the construction of the Masindi-Port Bridge over the River Nile and the upgrading of several key roadways, enhancing connectivity and supporting economic development in various regions.
