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Thursday, 26 September 2013 09:03

EAC Needs U.S.$115 Billion for New Projects

By David Muwanga

ARUSHA, Tanzania, September 26, 2013 (EABW) -- Heads of State of the East African Community (EAC) have proposed several sources where they can raise some $15 billion for both the prioritized regional railway and port projects. Among the sources mentioned were the Arab Bank for Africa (BADEA), the European Union and South Korea.


A report seen by East African Business Week in Arusha, Tanzania indicates the two regional infrastructure projects among others that are divided into several sub-projects require a total of $15bn for implementation in the next eight years up to 2020. The report follows the second EAC heads of State retreat on infrastructure development and financing held in Nairobi, Kenya late last year.


The retreat was held on the theme 'Deepening EAC integration process through the development of efficient infrastructure systems to support trade and industrialization'.


The leaders in the report indicate that among the sub-sectors is the railway which includes the rehabilitation of of the central line covering Dar es Salaam-Tabora-Mwanza/Kigoma, Kilua-Mpanda railway line with a spur to Kasanga.

They said that this line is crucial for linking Dar es Salaam port with the landlocked countries of Rwanda, Uganda and Burundi.


"Detailed technical studies ongoing financed by the African Development Bank with the initial study financed by the United States Trade Development Agency (USTDA)," reads part of the report. "This subproject requires about $1.425 bn and it is proposed that partner states could raise financing through Eurobond or blended financing," said the report. The report also mentions the construction of the Uvinza-Musongati railway line.


They recommended that the partner states utilize the fund for African Private sector assistance through the AfDB for technical assistance with the feasibility study. Other development partners can also be approached for partnership in the initial feasibility and design.


"This project is expected to connect Musongani in Burundi to the Kigoma-Tabora railway line in Tanzania,".


The leaders, according to the report also prioritized construction of the standard gauge Dar es Salaam-Isaka-Kigali/Keza-Gitega-Musongati railway line to link Dar port to Rwanda and Burundi estimated to cost $5.1bn.


They proposed sourcing funds from the Norwegian Sovereign Wealth fund and the Abu Dhabi investment authority. The leaders called for the completion of detailed designs and the construction of the Lamu-Isiolo-Moyale-Addis Ababa standard gauge railway estimated to cost $3.7bn. This is in addition to the Lamu-Isiolo-Nadapali-Nakodok-Juba estimated at $4.4bn and the Nairobi-Isiolo-Moyale-Addis railway line.


"The actual construction of the railway line be funded through public sources and development partners while public private partnerships participation is recommended for rolling stock," said the report.


The leaders also called for the fasttracking of the joint rehabilitation of the Kenya-Uganda railway, Mombasa-Nairobi-Malaba-Kampala with a branch line to Kisumu and Tororo-Pakwach. They said the project is crucial for increasing capacity and efficiency of bulk cargo transportation along the northern corridor and adjoining spur from Tororo to Pakwach. (EABW)




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