Uganda eyes Sukuk financing for Sh2.7b Standard Gauge Railway project

The Government of Uganda is in advanced stages of issuing its inaugural Sovereign Sukuk to finance 15 per cent of the total cost of the €2.7 billion Standard Gauge Railway (SGR) project.

Cabinet approved the SGR financing framework in January 2025, setting out a blended funding structure to mobilise the required resources for the strategic infrastructure project.

Under the arrangement, 60 per cent of the €2.7 billion will be sourced from Export Credit Agencies (ECAs), 15 per cent through the Sovereign Sukuk, while the remaining 25 per cent will come from Development Finance Institutions (DFIs).

The Sukuk—an Islamic-compliant financial instrument—marks a significant step in Uganda’s efforts to diversify its financing options for large-scale infrastructure development.

The Deputy Secretary to the Treasury (DST), Mr Patrick Ocailap, is currently leading Uganda’s delegation on a Sukuk roadshow across East Africa, covering Kenya, Tanzania and Zanzibar, to engage and attract investors ahead of the planned issuance.

The roadshow seeks to generate investor interest in Uganda’s inaugural sovereign Sukuk, whose official issuance date is expected to be announced later.

The delegation includes representatives from key institutions and transaction advisors, among them Yusra Sukuk as lead arranger, Stanbic Bank Group as book runners, Bank of Uganda, the Standard Gauge Railway project team, legal adviser Mr N. S. Kigozi, Salaam Bank Uganda Limited as receiving bank, as well as officials from the Debt Policy and Issuance Department of the Ministry of Finance, Planning and Economic Development.

Mr Ocailap said the roadshow is aimed at market sounding, pricing discovery and strengthening investor relations to ensure the successful rollout of the Sukuk.

He noted that the engagement with regional investors is a critical step in building confidence and ensuring competitiveness of Uganda’s entry into Islamic finance markets.

The Ministry of Finance, Planning and Economic Development (MoFPED) is expected to provide further details in the coming days on the structure of the Sukuk and its role in financing the SGR project, as Uganda expands its use of innovative financing mechanisms for infrastructure development.