The government of Uganda announced that it canceled a 2015 contract with China Harbor Engineering Co. (CHEC) to build a rail line linking the capital of Kampala and the Kenyan border. This follows an eight-year lag as the contractor failed to get Chinese policy bank funding for the $2.3 billion project.
Uganda has now signed an MoU with Yapi Merkezi, a contractor from Türkiye, and is reportedly considering a syndicated loan to finance the 273 km project. If this comes with a shift from the concessional rates usually charged for Chinese policy bank loans to commercial rates, it could have significant debt implications.
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