The Government of Uganda is in advanced stages of issuing the inaugural Sovereign Sukuk to finance 15 percent of the total cost of 2.7 billion euros (12 trillion shillings) for the construction of the Standard Gauge Railway (SGR). Cabinet approved the SGR financing structure in January 2025 reflecting the proportion and amounts to be mobilized.
A Sovereign Sukuk is a Sharia-compliant (Islamic) investment certificate issued by a government (or a government-backed entity) to raise funds.While an ordinary sovereign bond requires the borrower to pay interest regularly, a Sukuk works by giving the lender partial ownership of a real asset.
Of the 2.7 billion euro, 60 percent (7.15 trillion shillings) will come from Export Credit Agencies (ECAs),15%(about 1.79 trillion shillings) from Sukuk and the balance of 25 %(about 3 trillion) from Development Finance Institutions (DFIs).
The Deputy Secretary to the Treasury (DST), Patrick Ocailap is leading Uganda’s delegation on a Sukuk Roadshow in the East African Community, basically in Kenya, Tanzania and Zanzibar, to interest Investors to participate in the inaugural sovereign Sukuk Issuance on a date that will officially be announced.
The other members of the delegation include; the Yusra Sukuk-lead arranger, Stanbic Bank Group, the Book Runners, Bank of Uganda, a Standard Gauge Railway team, NS Kigozi Advocate (Sukuk Legal Advisor), Salaam Bank Uganda Limited (the Receiving Bank) and other staff in the Debt Policy and Issuance Department of the Ministry of Finance, Planning and Economic Development.
DST Ocailap said the aim of the roadshow is to create visibility in the market (market sounding), getting a clear picture on the pricing and building investor relations to ensure success of the planned Sovereign Sukuk Issuance.
The Uganda Standard Gauge Railway project is a 272 kilometre electrified line from Malaba to Kampala, estimated to cost almost 12 trillion shillings. The government tasked Turkish firm Yapi Merkezi in October 2024, to complete construction in four years, with expectations that Kenya would also have completed the stretch from Kisumu to the border at Malaba.
Construction camps, sleeper factory, batching plants, and equipment setup are advancing under a Limited Notice to Proceed. Land acquisition is ongoing in multiple districts. Kenya, in March this year, broke ground on the extensions which are aimed to create a seamless link from Mombasa to Kampala.-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
