Dar es Salaam – Sweden’s export-credit institutions and Tanzanian officials are due to finalise financing agreements for Lots 3 and 4 of the Standard Gauge Railway on April 28 in Dodoma, in a move both sides present as the next step in expanding the country’s electrified rail network towards Lake Victoria and the wider region. 

The project is part of Tanzania’s broader SGR programme, intended to strengthen freight and passenger links inside the country and improve connections with Uganda, Rwanda, Burundi and the Democratic Republic of Congo.

For Tanzania, the financing matters because it helps sustain one of East Africa’s largest infrastructure projects, estimated at US$10 billion, with the railway designed to connect Dar es Salaam and Dodoma and eventually extend towards Mwanza. 

The wider corridor is also central to efforts to unlock new trade routes and commodity flows across Eastern and Central Africa.

For Sweden, the deal is significant because it showcases a policy shift already set out in the government’s development reform agenda, which says trade, investment and infrastructure are essential alongside aid and argues for stronger synergies between development cooperation and trade policy. 

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In the SGR case, Swedish companies have already secured contracts worth more than SEK 1.5 billion (about Sh428.4 billion), mainly in signalling and advanced systems, while future procurement linked to Swedish solutions could reach about SEK 10 billion (about Sh2.8 trillion) as the railway expands.

“This milestone reflects how our partnership with Tanzania is evolving, bringing together public and private actors to support sustainable infrastructure,” a press release quoted Sweden’s Ambassador to Tanzania 

“The SGR is a catalyst for economic transformation, demonstrating how Sweden and Tanzania are working together in new ways to drive trade, connectivity, innovation, and long-term growth.”

The financing also underlines how export credit has become central to competition for large infrastructure contracts. SEK provides loans, and EKN guarantees payment risk, while EKN’s earlier case study on the first SGR phases says attractive long-term financing was crucial to securing Swedish signalling supply in the initial lots.

The electrified railway is meant to cut travel time, lower emissions, and support regional economic integration. Authorities believe shifting freight from road to rail could reduce congestion and accidents in a transport system in which more than 95 per cent of cargo from Dar es Salaam port has moved by road.

READ MORE: Central African Nations Experts Meet to Bolster Regional Transport Corridors 

There are signs the railway is already reshaping travel patterns. A total of 5,512,995 passengers used SGR trains on the Dar es Salaam-Morogoro-Dodoma route between June 2024 and March 2026, with Tanzania Railway Corporation (TRC) describing the service as a preferred mode of transport because of its speed, safety and reliability.

The African Development Bank said in December 2024 that it was helping mobilise up to US$1.2 billion for another SGR section through a syndication involving Deutsche Bank and Société Générale, suggesting Tanzania’s railway build-out is increasingly drawing a mix of export-credit, commercial and development-finance backing rather than relying on a single source.

Taken together, the April 28 signing points to a deepening bilateral relationship in which Swedish institutions are using finance, sustainability support and trade promotion in tandem, and Tanzania is using outside capital and technology to accelerate a flagship transport corridor. 

The parties to the agreement believe that the deal carries implications not only for the remaining SGR phases, but also for how future infrastructure projects in the region are financed, procured and framed around trade, sustainability and long-term partnerships.