Tanzania signs loan deal with China for crossborder rail project
Tanzania has signed a $7.6-billion concessional loan agreement with Export-Import Bank (Exim) of China to finance the construction of the standard-gauge railway line project connecting it with Rwanda, Burundi and the Democratic Republic of Congo (DRC).
The 2 561 km line will run from Dar es Salaam, in Tanzania, to Kigali, in Rwanda, with a link to Burundi and the DRC.
“It is expected that, once completed, the railway will revolutionise Tanzania's economy and the economies of other countries in East and Central Africa,” said a State House statement released after the signing of the agreement by Tanzania’s President John Magufuli and Exim president Liu Liang.
Last year, a consortium of Chinese railway companies led by China Railway Materials (CRM) was awarded the contract to build the railway line.
The line is one of the railway projects Tanzania is implementing at a cost of $14.2-billion over the next four years in efforts to become a regional transport hub.
The country has already signed a framework agreement with another Chinese company, China Railway No 2 Engineering Group, to build a 1 000 km standard-gauge railway line railway line linking coal and iron-ore mine projects to the Port of Mtwara. The project is expected to cost $1.4-billion.
Tanzania wants to profit from its long coastline. To that end, it plans to upgrade existing railways and roads to serve the growing economies in the landlocked heart of Africa, where extensive mineral discoveries have been made.
The new railway project will compete with a standard-gauge railway line being built from the coastal town of Mombasa, in neighbouring Kenya, through Kampala, in Uganda, and onwards to Kigali, in Rwanda.
The Tanzanian government has set aside $445.6-million for the project in the current financial year.
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