The Government of Uganda is in advanced stages of issuing its inaugural Sovereign Sukuk to finance part of the Euro 2.7 billion required for the construction of the Standard Gauge Railway (SGR), according to the Ministry of Finance, Planning and Economic Development.

The Ministry revealed that Cabinet approved the financing structure for the SGR project in January 2025, outlining how funds for the massive infrastructure project will be mobilized.

Under the approved structure, 60% of the financing will come from Export Credit Agencies (ECAs), 15% from the Sovereign Sukuk, while the remaining 25% will be secured from Development Finance Institutions (DFIs).

The planned Sukuk issuance marks a major milestone for Uganda’s financial markets and Islamic finance sector.

Deputy Secretary to the Treasury (DST) Patrick Ocailap is currently leading Uganda’s delegation on a regional Sukuk Roadshow across the East African Community, including Kenya, Tanzania and Zanzibar, to attract investors ahead of the official issuance.

The delegation includes representatives from Yusra Sukuk, the lead arranger, Stanbic Bank Group, Bank of Uganda, the Standard Gauge Railway team, NS Kigozi Advocates as Sukuk Legal Advisor, Salaam Bank Uganda Limited as the Receiving Bank, and officials from the Debt Policy and Issuance Department of the Ministry of Finance.

Speaking during the roadshow, the DST, Ocailap said the initiative is intended to strengthen investor confidence and ensure a successful debut issuance.

“The aim of the roadshow is market sounding, pricing discovery and building investor relations to ensure success of the planned Sovereign Sukuk Issuance,” Ocailap said.

The Ministry of Finance also noted that more detailed information about the innovative financing model and the significance of the upcoming Sovereign Sukuk issuance will be shared with Ugandans in the coming days.

A Sovereign Sukuk is a Sharia-compliant financial instrument similar to a government bond, but structured around ownership of assets or profit-sharing arrangements in line with Islamic finance principles that prohibit interest.

The planned Sovereign Sukuk issuance is expected to diversify Uganda’s financing sources, attract regional and international investors, and support infrastructure development through alternative capital markets.