Tanzania has signed a $1.2 billion commercial financing facility with a nine-bank syndicate to fund construction of the Tabora–Kigoma railway, the African Development Bank (AfDB) announced on Wednesday, November 4. The financing covers 411 kilometres of electrified track in western Tanzania and is supported by an $800 million partial credit guarantee, the largest arranged by the development bank to date.
The transaction brings international commercial lenders into a railway project designed to link inland production areas with Tanzania’s national network. It follows financing work undertaken with AfDB, Deutsche Bank and Société Générale as the country extends its rail corridor towards Lake Tanganyika.
Nine lenders and two risk tranches
Deutsche Bank and Société Générale co-arranged the facility alongside HSBC, Commerzbank, Nedbank, Stanbic Bank Tanzania, First Abu Dhabi Bank, FirstBank UK and Bank of Africa United Kingdom. The banks’ commitments comprise $720 million in guaranteed lending and another $480 million extended against Tanzania’s sovereign credit risk.
AfDB’s partial credit guarantee, capped at $800 million, covers principal on the protected tranche and two years of interest. Insurance broker Texel has placed $405.5 million of the bank’s exposure with international insurers, including Lloyd’s syndicates. The arrangement combines commercial bank lending, development-bank credit protection and private insurance capacity in a single financing structure.
The signed facility is the commercial component of a broader $2.3 billion financing package, which also includes an export credit agency tranche and a further tranche to be mobilised with a co-guarantor. Separately, the Tanzanian government has mandated AfDB to structure and mobilise up to $3.2 billion for the wider regional railway programme.
A railway link towards Lake Tanganyika
AfDB and its partners announced a coordination agreement in December 2024 to mobilise up to $1.2 billion. The facility announced on November 4 identifies the participating lenders and sets out how credit exposure is shared between banks and guarantors.
The Tabora–Kigoma line is intended to connect agricultural and mining areas in western Tanzania with the railway network serving the port of Dar es Salaam. By reaching Kigoma on Lake Tanganyika, it is also expected to improve trade links with eastern Democratic Republic of Congo, including through the ports of Kigoma and Kalemie, and with markets in Burundi.