Washington, D.C, September 15, 2007
— IFC, a member of the World Bank Group, today signed an agreement that will help connect regional markets in East Africa by financing railways linking Tanzania with six neighboring countries. This will reduce costs and delivery times for exports, improve the flow of goods to the interior, and make traveling more reliable for around 600,000 passengers a year.
The rail network connects Tanzania’s interior to the capital and principal port of Dar es Salaam and provides an essential link to external markets. IFC’s proposed $44 million loan will strengthen this network and enhance trade flows to neighboring, landlocked countries: Burundi, Rwanda, and Uganda, as well as eastern regions of the Democratic Republic of Congo.
“Rehabilitating and extending the rail network will significantly improve business prospects for Tanzania and East Africa,” said Rashad Kaldany, IFC Director for Infrastructure. “As the only lender to this project, IFC plays a critical role in addressing the lack of reliable and affordable infrastructure, one of the biggest development challenges in Africa today.”
Some new mining projects being planned in the country will also benefit from the project through more efficient and competitive transportation of imports and exports. The goods transported from the mines will help maximize the two-way flow of cargo to and from Dar es Salaam.
Tanzania Railways Limited is a concession company led by RITES of India and the government of Tanzania through Reli Asset Holding Company. Since March 2006, it has held a 25-year operating concession for the country’s railway network. The total cost of the project for rehabilitation, operation, and maintenance of Tanzania Railways is estimated at $111 million for the first five years.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
