Uganda’s SGR gets green light with largest-ever Shs2.6 trillion Islamic Development Bank financing package

The Islamic Development Bank (IsDB) Executive Board has approved EUR 650.75 million (approximately Shs2.6 trillion) in financing for Uganda’s Standard Gauge Railway (SGR) project. This marks the largest single-project funding ever approved by the bank for Uganda.

The historic milestone was reached on the sidelines of 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.”

Dr Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST), who led the Ugandan delegation as Temporary Governor, affirmed the government’s commitment to achieving full financial closure for the multi-billion-shilling railway project by November 2026.
The SGR is a strategic flagship venture aimed at modernizing Uganda’s transport infrastructure, reducing freight costs, and improving regional trade links with neighboring East African countries.

According to official details, the new IsDB funding will target critical infrastructural nodes along the network. Specifically, it will finance the construction of the 553-meter Jinja Nile Bridge, the 2.12-kilometer Mbuya-Kampala tunnel, and six major stations including Tororo, Iganga, Jinja, Lugazi, Kampala East, and Kampala City. Additionally, the funds will construct three mechanical workshops in Kampala East, Jinja, and Tororo.

By the end of May 2026, Uganda and the IsDB maintained eight active public operations (loans and grants) valued at USD 896.55 million, heavily dominated by the Integrated Transport Infrastructure Services Program.

Other ongoing IsDB-funded projects in the country span crucial sectors, including the upgrading of several national roads (such as the Muyembe-Nakapiripirit and Rwenkunye–Apac–Lira–Acholibur routes), the construction of the Masindi Port Bridge, irrigation schemes in Unyama, Namalu, and Sippi, vocational education, and the establishment of regional oncology centers in Arua and Mbale.
Speaking at the Governors’ Round Table, Dr. Ggoobi commended the bank for launching the IsDB Concessional Fund (ICF) in 2026. The fund aims to boost concessional financing to 15 per cent of annual approvals, bridging the gap between rising global debt and sustainable development.

“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 noted.
He urged multilateral lenders to reform, calling for a global financial architecture that is more inclusive, adaptive, and responsive to the needs of member countries.