Kenya is set to restart a multi-billion-dollar railway extension on Thursday, reviving a project stalled for over six years after initial funding from China dried up. The move uses revenue securitisation to finance the new phase of the railway.
The railway’s first section, connecting the port of Mombasa to Nairobi, was completed in 2017. However, construction stalled near the Rift Valley town of Naivasha, leaving the line more than 350 km short of the Ugandan border and delaying a planned cross-border link intended to boost regional trade and commerce.
Critics have labelled the stalled project as emblematic of China’s “debt trap diplomacy,” citing opaque loans extended for large African infrastructure projects. The Chinese government rejects these claims.
Last year, Kenya renegotiated terms of the loans for the first two phases with China to reduce annual repayments. Additionally, the Kenyan government amended legislation to allow the use of most of a railway development levy, estimated at 35 billion shillings ($270.27 million), as seed funding for the new phases.
While Chinese funding is limited under the new structure, government-owned China Road and Bridge Corporation remains a contractor on the project, according to Kenya Railways. Details on the total cost of the extension and deal structure were not disclosed.
Experts note that the agreement follows a 2024 summit in Beijing where African leaders and China agreed to focus on investment rather than debt to sustain infrastructure development. “Following the heavy propaganda regarding the debt burden, particularly from the West, China and Africa discussed a new model based on investments to sustain infrastructure building,” said Peter Kagwanja.
The revived railway extension is expected to enhance regional connectivity, improve trade flows, and reinforce Kenya’s strategic transport network across East Africa.
