The deal was inked at the African Investment Forum concluded on Thursday last week as the East African has reported.
The US$8.7 billion worth of investments will be earmarked to different sectors including transport, healthcare, energy and agriculture.
The three-day event was organized by the African Development Bank (AfDB) in collaboration with other finance organisations including Africa Export-Import (Afrexim) Bank and others.
The forum saw a total of US$36.2 billion raised out of the expected US$58 billion.
Of the funding, US$3.3 billion will be allocated for the construction of Isaka-Kigali railway.
The latter will be completed through public-private partnerships.
Commenting on the development; Dr. Akinwumi Adesina, AfDB president and chair of the forum said: “There is a lot of political support and goodwill for this, I can’t wait to see this railway. This is all part of improving the regional integration, and also accelerating the Africa Free Trade Area. It is going to drive down the cost of moving things.”
Other deals inked during the forum include an unspecified amount that will facilitate vaccines production in Kenya and agricultural investment to improve East Africa’s food security, especially wheat and grain production.
Isaka-Kigali is a joint 532 km railway project between Rwanda and Tanzania expected to be completed at a cost of USD$3.3 billion.
The project is much anticipated between both countries especially for Rwanda as a landlocked nation.
Sources reveal that Rwanda is required to pay US$4,990 per single container carrying 25,400 kgs. Once completed, the railway anticipates reduced transport costs by 40% hence positively impacting on Rwanda’s imports and exports.
Among others, the project will be impactful particularly for Rwandan traders considering the fact that 70% of Rwanda’s imported or exported cargos are transited through Dar es Salaam Port.
Rwanda and Tanzania began discussions for the construction of Isaka-Kigali railway in 2000. It will follow the track from Dar es Salaam, through Isaka and Rusumo in Kirehe before reaching Kigali.
Agreements to construct the 532-railway were signed on 9th March 2018.
On the side of Rwanda, the 532-km railway will pass through Rusumo border to Kigali city (at headquarters of Dubai Ports in Kicukiro). There will be an extra 18-km part of the railway leading to Bugesera International Airport.
The railway on the side of Rwanda will be 138 km with the rest of 394 being on Tanzania side.
Of the total US$3.6 billion estimated cost; Tanzania shall meet US$2.3 billion while US$ 1.3 billion is required on Rwanda’s side.
It is reported that landmarks for Isaka-Kigali railway passage have been erected from Rusumo to Ndera in Kigali city.
It is expected that the railway will be expanded to the democratic Republic of Congo (DRC), once the country’s request is approved.
Apart from Isaka-Kigali railway, Rwanda also joined Northern Corridor countries including Kenya, Uganda and South Sudan for the implementation of a $13.8 billion flagship railway project that links Mombasa to Kigali and the railway expected to dramatically boost East African’s position as a regional economic hub.
Speaking to the media on Thursday 9th September 2021, the former Minister of Infrastructure, Amb. Claver Gatete said that the construction of a railway linking Kigali to Isaka in Tanzania would begin in the near future.
At the time, he disclosed that almost all discussions and feasibility study had been finalized.
“We have made two major steps paving the way for implementation. The first is about meeting all requirements to begin construction of the railway. The second is about making a holistic project study preceding construction. In fact, we have completed all basic preparations,” he said.
“The remaining task is to work with the African Development Bank which helped us to design the project’s study so that we can discuss sources of funds to build the railway, consider how much we have and need as well as determining how best they can be utilized. This is what we are discussing,” Amb. Gatete added.
The Minister also revealed that construction works would begin right after settling the issue.
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