Uganda has secured a major boost for the development of its Standard Gauge Railway (SGR) after the Executive Board of the Islamic Development Bank (IsDB) approved financing worth EUR 650.75 million (about Shs2.6 trillion) for the project.
The approval represents the largest amount ever committed by the IsDB to a single project in Uganda.
The funding was approved during the 51st IsDB Group Board of Governors’ Annual Meetings held in Baku, Azerbaijan, from June 16 to 19, 2026, under the theme, “Regional Integration for Sustainable Prosperity.”
Leading Uganda’s delegation as Temporary Governor, Permanent Secretary and Secretary to the Treasury, Dr. Ramathan Ggoobi, said the government remains committed to achieving full financial closure for the multi-billion-shilling railway project by November 2026.
The SGR is one of Uganda’s flagship infrastructure projects and is expected to modernize the country’s transport system, lower the cost of moving goods, and strengthen trade connectivity with neighboring East African countries.
According to details released by government officials, the IsDB financing will support the construction of several key components along the railway corridor. These include the 553-metre Jinja Nile Bridge, the 2.12-kilometre Mbuya–Kampala tunnel, six major stations in Tororo, Iganga, Jinja, Lugazi, Kampala East and Kampala City, as well as mechanical workshops in Kampala East, Jinja and Tororo.
As of the end of May 2026, Uganda and the IsDB had eight active public sector operations, comprising loans and grants worth USD 896.55 million. A significant share of this portfolio is invested in the Integrated Transport Infrastructure Services Programme.
The bank is also financing projects in other sectors, including the upgrading of roads such as the Muyembe–Nakapiripirit and Rwenkunye–Apac–Lira–Acholibur highways, construction of the Masindi Port Bridge, irrigation schemes in Unyama, Namalu and Sippi, vocational education initiatives, and regional oncology centres in Arua and Mbale.
During the Governors’ Round Table, Dr. Ggoobi welcomed the launch of the IsDB Concessional Fund (ICF) in 2026, which seeks to increase concessional financing to 15 percent of the bank’s annual approvals.
He said the fund comes at a critical time when traditional foreign aid is becoming less predictable and insufficient to meet development needs.
“This fund is crucial in light of declining traditional foreign aid flows, both in volume and reliability, which has widened the financing gap,” Dr. Ggoobi said.
He further called on multilateral financial institutions to undertake reforms that would create a more inclusive, flexible and responsive global financial system capable of addressing the development priorities of member states.
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