KAMPALA (Reuters) -Uganda is in talks with development finance institutions and credit export agencies to have 85% of a planned railway project financed with debt, a senior official said on Wednesday, amid concerns over an already-high public debt pile.
Turkey’s Yapi Merkezi won the contract to build the 2.7 billion euros ($3.15 billion) railway in October last year and preliminary works have begun.
Some of the potential financiers include the OPEC Fund for International Development, Africa Development Bank, Islamic Development Bank and some European export credit agencies, Perez Wamburu, head of the railway construction project, told Reuters.
Wamburu said the debt financing talks were in advanced stages and expected to be completed soon.
“The possible financiers are available … the Finance Ministry is actively engaged with them and financial closure should be soon,” he said.
The Ugandan government will finance 15% and has released $75 million to fund the preliminary work, Wamburu said.
The 272-kilometre (169-mile) line is the first section of a planned 1,700 km electric rail line in the landlocked east African country.
It will run from Uganda’s capital Kampala and connect with neighbouring Kenya’s railway at the Malaba border point. ($1 = 0.8580 euros)
(Reporting by Elias Biryabarema; Editing by George Obulutsa and Bernadette Baum)
