Kenya’s Standard Gauge Railway (SGR) ambitions are set to receive a fresh lease of life following Uganda’s signing of an $800 million, which is equivalent to Ksh104 billion financing agreement with the Islamic Development Bank to support its inland rail extension.

The landmark deal, signed this week during the bank’s annual meeting in Algiers, will fund Uganda’s long-delayed SGR line from Malaba to Kampala—an essential link that will finally connect Uganda’s capital to Kenya’s SGR line and the Indian Ocean port of Mombasa.

“Uganda has signed a $800 million(Ksh 104 billion) financing agreement with the Islamic Development Bank to support projects, including a planned railway, that aim to boost the landlocked East African country’s trade, its finance ministry said,” to Reuters reporter.

For Kenya, the announcement signals a breakthrough in one of East Africa’s most strategic infrastructure dreams: transforming the SGR from a standalone domestic line into a regional freight artery that stretches from the coast deep into the Great Lakes region.

Uganda’s renewed commitment comes after years of hesitancy and budgetary delays that left Kenya’s SGR project, launched in 2017 at a cost of Sh327 billion, effectively stopping at Naivasha. With limited cargo volumes and rising debt-servicing costs, Kenya has struggled to recoup the investment without cross-border connectivity.

The viability of our SGR line has always depended on regional integration. Uganda’s funding commitment repositions Mombasa as the preferred port for landlocked neighbours and revives investor interest in extending the SGR westward from Naivasha. The planned connection also stands to benefit Kenyan logistics firms, construction companies, and state agencies. More cargo from Uganda, Rwanda, and the Democratic Republic of Congo will likely flow through Mombasa, driving volumes at inland container depots in Naivasha and Nairobi, and opening new opportunities in warehousing, trucking, and customs clearing.

Moreover, job creation could receive a welcome boost as local subcontractors gear up for renewed works if Kenya resumes its own SGR extension toward Malaba to meet Uganda halfway.