Uganda has secured a $800 million financing agreement with the Islamic Development Bank (IsDB) to fund major infrastructure projects aimed at boosting trade and development across the country. The deal was announced by the Ministry of Finance and Planning and includes support for a new railway project that will link Uganda to Kenya’s Standard Gauge Railway (SGR), providing easier access to the Indian Ocean port of Mombasa.
The agreement was signed during the annual meeting of the Saudi Arabia-based development bank held in Algiers, Algeria. Uganda was represented by Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury, while the Islamic Development Bank’s Vice President, Rami Ahmed, signed on behalf of the bank.
According to the ministry, the funds will be used over the next three years to implement key projects in sectors such as transportation, energy, and healthcare. The main project is the construction of a railway line that will boost regional trade by providing a faster and more reliable connection between Uganda and international markets through Kenya.
The planned railway is expected to reduce the cost of transportation for Ugandan businesses, especially for imports and exports, by offering an alternative to road transport which is often delayed by congestion and poor road conditions. This will be a big relief for traders and manufacturers who depend heavily on efficient transport systems to remain competitive.
The railway is also designed to align with Kenya’s Standard Gauge Railway, which currently runs from the port city of Mombasa to Naivasha. By linking into this network, Uganda hopes to integrate more closely with regional economies and create a seamless transport corridor that stretches from the heart of East Africa to the Indian Ocean.
In addition to the railway, the $800 million will be invested in health infrastructure to improve access to medical services in rural and underserved areas. It will also be channeled into energy projects aimed at expanding electricity access and supporting Uganda’s goal of achieving middle-income status through industrialisation and infrastructure development.
The government said it is confident that the partnership with the Islamic Development Bank will deliver long-term benefits for the country’s economy. Speaking after the signing, Mr. Ggoobi described the agreement as “a significant step forward in Uganda’s development journey.” He added that the funding will help implement President Yoweri Museveni’s strategy of improving connectivity, energy access, and social services.
Vice President Rami Ahmed praised Uganda’s development priorities and reaffirmed the bank’s commitment to supporting African countries in building sustainable and inclusive growth. The IsDB has previously funded several projects in Uganda, including roads, hospitals, and energy programs.
Uganda remains one of the region’s fastest-growing economies, but it continues to face challenges related to infrastructure deficits, access to financing, and trade barriers. The latest deal with the Islamic Development Bank is expected to improve the country’s ability to trade, attract investment, and improve the living conditions of its people.
