Uganda Approves €405 Million Rail Loan as Resettlement Funding Gap Persists

Uganda plans to give 2,217 households a safer place to live, but more than 10,558 others will remain exposed to landslides around Mt Elgon. That gap sits alongside another major funding challenge: building a long-delayed railway to improve cargo links with Kenya. Cabinet has approved the resettlement programme’s implementation and a €405 million railway loan, according to Nile Post Uganda (direct).

Minister of ICT and National Guidance Justine Kasule Lumumba announced the decisions after a Cabinet meeting on Monday. The current resettlement intervention has an allocation of more than Shs62 billion, in Ugandan shillings. Each eligible household is to receive two acres in a safer location and Shs10 million to build a home. With heavy rains expected, the government estimates that another Shs190 billion will be needed to relocate all affected households.

Lumumba said each eligible household would receive two acres of land and Shs10 million for house construction.

The latest approval expands an existing effort rather than starting a new one. The government launched the programme’s second phase in March 2026 with an initial Shs56 billion. By June, the Office of the Prime Minister reported that more than 1,000 acres had been acquired and hundreds of families had moved from vulnerable areas in Bugisu to Kween District. The remaining households underline the scale of the work still ahead.

Railway funding and rules move together

Cabinet also approved a €405 million loan for the Malaba-Kampala Standard Gauge Railway, or SGR, project. Uganda is still seeking the wider financing needed for the long-delayed line. The project is intended to strengthen regional trade and offer another way to move cargo between Uganda and Kenya’s port of Mombasa. Reviving rail transport is also part of the government’s effort to improve passenger and freight movement while easing pressure on roads.

The loan decision follows the Islamic Development Bank’s approval in June of €650.75 million for the SGR project. That financing includes the 553-metre Jinja Nile Bridge, a 2.12-kilometre tunnel between Mbuya and Kampala, six stations and three workshops. Alongside financing, Cabinet backed replacing the Uganda Railways Corporation Act with a proposed Uganda Railway Bill. Lumumba said the legislation would account for technological changes and other developments in the industry.

University revival adds another spending commitment

Cabinet also directed the Finance Ministry to provide Shs89.998 billion to establish Iganga University and allow it to begin operating. The planned public institution in the Busoga sub-region will be formed from the former private Busoga University, whose licence was revoked in 2017. The Church of Uganda handed the institution and its assets to the Education Ministry in December 2024. Namasagali will become a constituent college focused on marine and fisheries studies, with other inherited campuses also incorporated.

Separately, this year’s Independence Day celebrations will be virtual, with only 30 people expected at State House Entebbe. The next steps on the broader package are more substantial: securing the railway’s wider funding, extending resettlement beyond the current allocation and completing the university’s legal process. The education and justice ministries must prepare its founding legal instrument before the education minister seeks Parliament’s approval.