The United Republic of Tanzania has signed a $1.2 billion commercial financing facility for the Tabora–Kigoma section of its Standard Gauge Railway, known as Lot 6, with the African Development Bank (AfDB) acting as Initial Mandated Lead Arranger, according to a press release issued by the AfDB on 04-Nov-2026. The Bank structured and arranged a Partial Credit Guarantee (PCG) of $800 million, its largest to date. Tanzania had mandated the Bank to structure and mobilize up to $3.2 billion for its regional railway development. The operation is designed to advance the Central Corridor as a productive regional economic corridor. It combines AfDB’s transport sector expertise with its financial structuring and guarantee capabilities.
Delivering the project required a financing approach capable of mobilizing capital from multiple investor classes. A key priority was to align the financing requirements and risk appetites of various institutions within a unified financing structure. This had to be done while managing the country’s other debts and geopolitical events that affected interest rates. The financing supports a strategic infrastructure investment for the country. The transaction reflects the Bank’s broader mobilization mandate.
The Bank mobilized a nine-bank syndicate for the $1.2 billion commercial facility, co-arranged by Deutsche Bank and Société Générale. Other lenders include HSBC, Commerzbank, Nedbank, Stanbic Bank Tanzania, First Abu Dhabi Bank, FirstBank UK and Bank of Africa United Kingdom. Commitments comprise $720 million of guaranteed lending and $480 million of lending based on clean risk to the sovereign. The $1.2 billion signed facility forms part of an overall $2.3 billion financing package. Outside this commercial tranche, the package includes an ECA tranche and a further tranche to be mobilized in collaboration with a co-guarantor.
At the center of the commercial tranche is a non-market priced AfDB PCG of up to $800 million, covering the principal of the covered tranche plus two years of interest. AfDB remains Guarantor of Record, while credit insurance arranged by insurance broker Texel distributes $405.5 million of exposure to a panel of international insurers, including Lloyd’s syndicates. The financing will support the construction of the 411-kilometre electrified Tabora–Kigoma line.
Max Ndiaye, Senior Director African Development Bank Group, said: “By combining development finance, commercial lending and insurance capacity, we have successfully unlocked the scale of financing required to deliver this type of transformational regional infrastructure.” He added that it reflects the vision behind the New African Financial Architecture for Development (NAFAD).
The line will connect to Tanzania’s wider railway network and the port of Dar es Salaam, and support trade with the Democratic Republic of Congo across Lake Tanganyika through Kigoma and Kalemie ports. The wider regional railway programme will strengthen links with Burundi and further into Eastern DRC. Farmers, mining operators and the general population are expected to benefit from more efficient transport, lower transport costs and employment opportunities during construction and operation. The transaction advances the Bank Group’s Ten-Year Strategy 2024–2033 and its Four Cardinal Points, particularly unlocking Africa’s capital and building resilient infrastructure and competitive value chains. It translates the Bank’s capital mobilization mandate into tangible support for trade, industrial development and regional integration.