Uganda moves closer to inaugural sovereign sukuk to fund Standard Gauge Railway
Sukuk, commonly referred to as Islamic bonds, are financial instruments structured in compliance with Islamic finance principles and are increasingly being adopted globally as an alternative means of raising capital for large infrastructure projects.
The Government of Uganda is in advanced stages of issuing its inaugural Sovereign Sukuk as part of efforts to finance the construction of the country’s long-awaited Standard Gauge Railway (SGR) project.
According to the Ministry of Finance, Planning and Economic Development, the Sukuk issuance is expected to raise 15 percent of the total Euro 2.7 billion required for the implementation of the SGR project, which is considered one of Uganda’s key strategic infrastructure investments.
Cabinet approved the financing structure for the railway project in January 2025, outlining the different funding sources for the multi-billion-euro infrastructure development. Under the approved arrangement, 60 percent of the financing will come from Export Credit Agencies (ECAs), 15 percent through the Sovereign Sukuk, while the remaining 25 percent will be sourced from Development Finance Institutions (DFIs).
The Deputy Secretary to the Treasury, Patrick Ocailap, is currently leading a Ugandan delegation on a Sukuk roadshow across the East African Community to mobilize investor interest ahead of the issuance. The delegation is engaging potential investors in Kenya, Tanzania and Zanzibar as preparations intensify for the official launch date, which government says will be announced later.
The delegation includes representatives from Stanbic Bank Uganda, the lead arranger Yusra Sukuk, Bank of Uganda, the Standard Gauge Railway technical team, NS Kigozi Advocates who are serving as Sukuk legal advisors, and Salaam Bank Uganda Limited, which has been appointed as the receiving bank. Officials from the Debt Policy and Issuance Department at the finance ministry are also part of the roadshow team.
Ocailap said the regional engagements are aimed at market sounding, pricing discovery and strengthening investor relations to ensure the success of Uganda’s first Sovereign Sukuk issuance.
“The roadshow is intended to engage investors, understand market appetite, support pricing discovery and build strategic relationships that will contribute to the successful issuance of the Sovereign Sukuk,” Ocailap noted.
The Ministry of Finance said it will in the coming days provide more information to the public on the nature of Sukuk financing and the significance of the planned issuance to Uganda’s infrastructure development agenda.
Sukuk, commonly referred to as Islamic bonds, are financial instruments structured in compliance with Islamic finance principles and are increasingly being adopted globally as an alternative means of raising capital for large infrastructure projects.
