Work restarts on Kenya's stalled railway after six-year halt
The project stalled when funding from China dried up, holding up a planned cross-border link intended to boost connectivity and trade with Uganda.
Kenya on Thursday restarted a multibillion-dollar railway extension after a six-year hiatus, reviving a project that stalled when funding from China dried up and delayed plans to link the line to neighbouring Uganda.
The new phase will be financed through revenue securitisation and will be built by a Chinese contractor, marking a shift in how Kenya and Beijing are funding large infrastructure projects.
The railway's first section, linking the port of Mombasa to Nairobi, was completed in 2017.
But after China slashed funding for large African infrastructure projects under its Belt and Road Initiative, the project stalled in the Rift Valley, more than 350 km short of the Ugandan border, holding up a planned cross-border link to boost regional connectivity and commerce.
"It was the naysayers who said it is a railway to nowhere. We are just confirming to them that we had a plan. It was never a road to nowhere," Kenya's President William Ruto told a crowd at a launch ceremony in the Rift Valley town of Narok, before fastening a bolt to fix a rail part to a sleeper to signify the start of construction.
Renegotiated terms
Last year, Kenya and China renegotiated terms of the loans for the first two phases to cut Nairobi's annual repayments.
Kenya is now using a railway development levy charged on cargo carried on the existing line, estimated to raise about 35 billion shillings ($270 million) annually, as seed money for the construction of new phases.
Neither the government nor state rail operator Kenya Railways disclosed the total cost of the extension or details of the financing structure.
China remains involved in the project. China Road and Bridge Corporation (CRBC) is the main contractor for the new phase.
The deal was enabled by a 2024 shift by China to focus on investments rather than debt, said Peter Kagwanja, a Nairobi-based international relations expert.
"Following the heavy propaganda in regard to the debt burden, particularly from the West, China and Africa discussed a new model based on investments to sustain the level of building infrastructure," Kagwanja said.