Uganda's government has signed a contract with Türkiye's Yapı Merkezi to build a 272-kilometer (169-mile) section of railway, aiming to enhance regional trade, a Ugandan official announced on Monday, in one of the largest projects undertaken by a Turkish construction firm abroad.

Uganda's Standard Gauge Railway (SGR) project coordinator, Perez Wamburu, said the agreement was for the first section of a planned 1,700 km electric rail line, and the segment would cost 2.7 billion euros ($3 billion).

Its construction will start in November, Wamburu said.

The project will increase trade and reduce transport costs, Uganda's Works Ministry Permanent Secretary Bageya Waiswa said at the signing ceremony.

The agreement was signed in Kampala by Waiswa and Yapı Merkezi Holdings Vice Chairman Erdem Arıoğlu. Uganda's Minister of Works and Transport, Gen. Edward Katumba Wamala, and Turkish Ambassador Fatih Ak were also among the officials present.

"It is one of the largest projects signed by Turkish contractors abroad," Yapı Merkezi said on social media platform X.

Waiswa said Uganda would use its own funds and credit from export credit organizations to finance the project, which will take 48 months to complete once started.

The rail section will run from the capital, Kampala, to Malaba at the border with Kenya, connecting landlocked Uganda to its neighbor's rail network and onto the Indian Ocean seaport of Mombasa.

Ambassador Ak emphasized Türkiye's commitment to sharing its railway expertise to help modernize Uganda's rail network.

Uganda entered into an agreement in 2015 with China Harbour and Engineering Company Ltd (CHEC) to implement the project on the condition that the firm helped secure funds for the railway from the Chinese government.

Wamburu earlier said Uganda's attorney general was prompted to review the contract with the CHEC after it became apparent that the China Exim Bank was reluctant to bankroll the project.

After years of fruitless talks, Uganda last year terminated the agreement and entered talks with Yapı Merkezi, which is carrying out a similar project in neighboring Tanzania.

In Tanzania, Yapı Merkezi helped build a 1,219-kilometer standard gauge railway line that the country developed as part of efforts to boost trade with Uganda and other neighboring countries.

Another Turkish firm, Polat Yol Yapi, is also active in Uganda, working on the 92-kilometer Muyembe-Nakapiripirit road project, which will connect Uganda to Kenya, South Sudan, and Ethiopia.

The Turkish contracting firms have completed 1,864 projects across Africa worth $85.4 billion as of the end of 2023, according to data from the Foreign Economic Relations Board of Türkiye (DEIK).

Turkish companies' investments across the continent exceed $10 billion, and their firms employ more than 100,000 Africans.

Türkiye's engagement with the continent has been gaining pace over the years. Since taking office nearly two decades ago, first serving as prime minister, President Recep Tayyip Erdoğan has been fostering ties with Africa, presenting Türkiye as a fairer player than the continent's former colonial powers.

The diplomatic push has seen Türkiye's trade volume with Africa surge to nearly $41 billion as of the end of 2022, from as low as $5.4 billion in 2003.

The government's priority to engage with Africa has helped facilitate the growth of business and trade relations. It came with a strong commitment focused on direct aid, infrastructure, transportation projects and mutually beneficial economic partnerships.