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Kenya: China gives $1.5 bn loan for railway extension

By Duncan Miriri
Posted on Monday, 7 December 2015 10:29

The faster railway being built from the Indian Ocean port of Mombasa is expected to reach Nairobi next year and open up to commercial services in mid-2017.

The Chinese-financed project is the first stage in a scheme that aims to extend to Uganda and other land-locked countries. The goal is to cut the cost of transport and boost trade, by replacing a slower, narrow-gauge line.

The Standard Gauge Railway remains the single largest investment in Kenya’s economy in the last five decades

Spokesman Manoah Esipisu said the extension to Naivasha will offer access to an industrial park to be built there to accommodate manufacturing firms wishing to use power from the nearby geothermal steam fields that are being developed.

“Kenya and China signed a financing package for the extension. China Eximbank will provide a $1.5 billion loan, 85 percent of the financing, while Kenya will provide the balance,” he told a news conference.

The deal was signed on the sidelines of the Forum for China-Africa Co-operation, which was held in Johannesburg.

Kenya Railways and China Communications Construction Company Ltd have also signed a deal to carry out feasibility studies and initial designs for the second leg of the Mombasa-Nairobi line, which will stretch to Malaba on Kenya’s border with Uganda.

“The Standard Gauge Railway remains the single largest investment in Kenya’s economy in the last five decades,” Esipisu said. Kenya has also signed or is close to concluding various deals with China for the expansion of the electricity grid, he said.

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