Potential investors are weighing income prospects in financing the implementation of the Standard Gauge Railway (SGR) project, according to the African Development Bank (AfDB) Director General for Eastern Africa, Nnenna Lily Nwabufo.
Currently, Rwanda has two route options on the table, the Kenyan Standard Gauge Railway route for the northern corridor and Isaka-Kigali Standard Gauge Railway for the central corridor.
The 521-kilometre Isaka-Kigali SGR is projected to cost an estimated $2.5 billion.
She disclosed that investors are looking at the likely volume of services and trade attached to the railway project and whether there is enough income to be generated from that to be sure of investment viability.
Nevertheless, she said that the intention is to “raise more money internally” as each involved country will have to make a commitment of the amount of money they will allocate to the project from the funding they get from the bank.
“We also have additional resources that are supposed to encourage such regional projects… of which upon approval, they will get more money as a matching fund,” she added.
Given the investment that is required, she noted, it has to be phased, “there is no point in jumping into the market to borrow $7 billion for something that might take you three to four years.”
Nwabufo added that they are considering pitching the railway project to African Investment Forum to gather inputs from investors after attracting interest from the previous meeting.
The AIF is Africa’s investment marketplace, championed by AfDB and its partners to accelerate the closure of the continent’s investment gaps.
Rwanda, as a landlocked country, could benefit tremendously from the project by connecting to the Mombasa and Dar es Salaam ports which would reduce logistics costs and it is also expected to ease and reduce the cost of movement of people and goods across the region.
Nwabufo did not specify the timeframe to track the project’s progress to be made.