BEIJING – Kenya is seeking more funding from China to complete the Standard Gauge Railway in a joint bid with Uganda, the DRC and Congo Brazzaville.
Speaking during the Kenya-China investors roundtable in Beijing, China, on Tuesday, President Ruto said talks have begun for the joint initiative in bid to improve flow of cargo and make the northern corridor competitive after the SGR stalled in Naivasha.
In seeking the viability of the railway after the initial financier, China, pulled out of the project, Kenya and Uganda in July this year announced they were seeking $6 billion to extend the railway.
President Ruto confirmed they are trying to bring China on board to complete one of the key Belt and Road Initiative projects in the country.
“Why we are discussing with China on extending the Standard Gauge Railway beyond Naivasha into Uganda, DRC, all the way to Congo Brazzaville is because we want to connect the eastern coast of Africa to the western coast of Africa using the SGR,” President Ruto said.
“We have had conversations with the Presidents of Uganda, DRC and Congo Brazzaville and we have all agreed on the need to extend this piece of infrastructure as a means of facilitating trade across our continent and making sure companies like yourselves, who set up in Kenya, not only have access to the Kenyan market but also the Eastern African and continental market. We have made the decision that is the way to go,” Ruto told the investors, adding that the project will be a joint bid.
In the plan, the railway will extend to Kampala, Kasese to Mpondwe near the border with DR Congo. It will also head to Rwanda and South Sudan to make the northern corridor competitive.
President Ruto said the project will improve cargo transportation, where goods from Mombasa port to Uganda and on to DRC, Rwanda and South Sudan will be done by rail.
In July, Transport ministers Kipchumba Murkomen (Kenya) and Katumba Wamala ( Uganda) agreed to jointly source for financing, either in form of loans or a public-private partnership arrangement, for the project to resume.
Phase 2B from Naivasha to Kisumu is expected to cost Sh380 billion, while phase 2C, from Kisumu to Malaba, will take another Sh122.9 billion.
CS Murkomen at the time indicated they had placed their offers to different financiers from Europe and in the Middle East who had shown interest in investing in the project. However, with President Ruto’s remarks in Beijing, it appears focus is now on China.
This kind of project was in fact envisaged 8 years ago but fell through as Uganda and Kenya failed to raise financing from China, Murkomen said then.
Part of the deal is likely to be settled in Beijing following a meeting between CS Murkomen and a Chinese delegation led by Deng Li, the Vice Minister of Foreign Affairs, in Nairobi in July 2023.
Their discussions were centred on “pending projects in the roads and transport sector as discussed with President Ruto”, setting the stage for the escalation of the deliberations at the highest level during Ruto’s visit.
The meeting was followed by another one in Beijing on September 28, when the CS met his counterpart, Li Xiaopeng to discuss the infrastructure projects.
Following the meeting, Murkomen said through “partnerships” with China, there are hopes to complete the ongoing road projects in Kenya and achieve the extension of the SGR to Malaba, dualling of main highways and expand Kenyan ports as well [JKIA] airport infrastructure.
Deputy President Rigathi Gachagua on October 6 said President Ruto would while on the visit to China be seeking more financing to complete stalled projects as well as seek an extension on the repayment timeline of previous Chinese loans.
“Can we talk to see if you can add us time, so we can pay slowly, and add us a little money so we can finish road construction? If we get $1 billion, we can be able to give these people [contractors] the money they are owed so they can return on site so even as we pay the debt, the roads are completed,” the Deputy President told Inooro FM, a local radio station.