Tanzania to spend $14 billion on railways, eyes regional hub status

Tanzania plans to spend $14.2 billion to construct a new rail network in the next five years financed with commercial loans, the transport minister said, as the country aims to become a regional transport hub.

Tanzania, like its neighbour Kenya, wants to capitalize on a long coastline and upgrade existing rickety railways and roads to serve growing economies in the land-locked heart of Africa.

Oil and gas discoveries in Kenya, Uganda and Tanzania have turned the East African region into an exploration hotspot but transport infrastructure in those countries has suffered from decades of under-investment.

"This will be the single biggest project ever to be implemented by the Tanzanian government since our country's independence," Transport Minister Samuel Sitta said in a statement seen by Reuters on Monday, referring to the year 1961.

The projects include constructing a 2,561 km (1,536 miles) standard gauge railway connecting the port at the commercial capital of Dar es Salaam to Tanzania's land-locked neighbours, Rwanda and Burundi at a cost of $7.6 billion, Sitta said.

Two additional lines, to be built at a combined cost of $6.6 billion, would connect Dar es Salaam to the coal, iron ore and soda ash mining areas in the south and northern parts of the country, he said.

Sitta said the projects would be financed by commercial loans from a consortium of banks under a 20-year repayment period, though he did not name the banks. The government has appointed Rothschild to help secure the financing, he said.