Uganda has secured a major infrastructure boost after receiving Shs2.73 trillion (€650.75 million) in financing from the Islamic Development Bank (IsDB) for the construction of key sections of the long-delayed Standard Gauge Railway (SGR), a project expected to significantly strengthen regional trade while enhancing maritime connectivity between the Port of Mombasa and Uganda.

The approval, announced during the 51st Islamic Development Bank Group Annual Meetings held in Baku, Republic of Azerbaijan, from June 16–19, 2026, represents the largest single project financing ever approved by the Bank for Uganda.

Beyond improving domestic transport, the investment is expected to reinforce East Africa's multimodal transport system by integrating rail transport with maritime services operating through the Port of Mombasa.

The railway is expected to facilitate faster movement of imports from the port into Uganda while enabling exports from Uganda to reach international markets more efficiently. It also complements ongoing regional efforts to promote seamless maritime trade and strengthen shipping connectivity across Eastern and Southern Africa.

The funding marks a critical milestone for Uganda's flagship railway programme, designed to transform freight movement, reduce transport costs, strengthen regional trade integration, and improve the efficiency of cargo moving between inland markets and seaports.

The announcement was made under the theme "Regional Integration for Sustainable Prosperity," underscoring the Islamic Development Bank's commitment to financing cross-border infrastructure that promotes economic integration and sustainable growth.

Uganda's delegation was led by Mr. Ramathan Ggoobi, Permanent Secretary and Secretary to the Treasury at the Ministry of Finance, Planning and Economic Development, who welcomed the financing as a major step towards closing Uganda's infrastructure gap and accelerating implementation of strategic transport corridors that support regional economic integration.

The Shs2.73 trillion facility will finance some of the most technically demanding and capital-intensive components of the 272-kilometre Malaba-Kampala Standard Gauge Railway.

These include construction of the 553-metre Jinja Nile Bridge, a 2.12-kilometre tunnel linking Mbuya and Kampala, six major railway stations in Tororo, Iganga, Jinja, Lugazi, Kampala East, and Kampala City, as well as three operational workshops in Tororo, Jinja, and Kampala East.

The Malaba-Kampala line forms the backbone of Uganda's national SGR network and will directly connect with Kenya's Standard Gauge Railway at Malaba.

Once completed, the railway will establish a continuous high-capacity freight corridor linking the Port of Mombasa to Uganda and onward to neighbouring countries in the Great Lakes region. The improved corridor is expected to reduce cargo transit times, lower logistics costs, decongest highways, and provide a more reliable transport option for importers and exporters.

As regional partners pursue greater maritime integration through initiatives such as the proposed regional cabotage framework, improved inland rail connectivity is expected to play a complementary role in creating an integrated sea-rail logistics network across Eastern Africa.

The total cost of the Malaba-Kampala SGR is estimated at Shs11.34 trillion (€2.7 billion). With the Islamic Development Bank financing nearly one quarter of the project cost, Uganda still needs to mobilise approximately Shs8.61 trillion to achieve full financial closure.

The Government of Uganda has consistently identified the SGR as a strategic investment for lowering logistics costs, enhancing export competitiveness, attracting industrial investment, and reducing dependence on road freight transport.

Construction has already been launched under President Yoweri Museveni, with the contract awarded to Turkish engineering company Yapi Merkezi, which has delivered several major railway projects across Africa, including Tanzania's Standard Gauge Railway.

Uganda's partnership with the Islamic Development Bank has continued to deepen beyond the railway programme.

As of May 2026, Uganda had eight active public sector operations financed by the Bank, comprising loans and grants worth approximately US$896.55 million. Around US$721 million of this portfolio has been allocated to transport infrastructure, demonstrating the country's continued emphasis on improving regional connectivity, facilitating trade, and supporting economic transformation through strategic infrastructure investment.