Kenya resumes railway extension after six year delay

Kenya is set to revive a multi-billion-dollar railway extension project on Thursday, ending a six-year stall caused by a reduction in funding from China. The project, which was originally part of a broader regional connectivity plan, is now being restarted using a new financing model based on revenue securitization. This shift comes after initial lending from Beijing for large-scale infrastructure projects across Africa began to dry up in 2019.

The first section of the railway, which links the port of Mombasa to Nairobi, was completed in 2017. However, the line currently ends near the town of Naivasha, more than 350 kilometers short of the border with Uganda. The delay in completing this cross-border link has long been cited as a barrier to boosting regional commerce and trade efficiency.

Under the new financing arrangement, the Kenyan government has modified legislation to allow the use of a railway development levy as seed money for construction. This levy, collected from cargo transported on the existing rail line, is estimated to generate approximately 35 billion shillings ($270.27 million). This approach allows the state to fund infrastructure without increasing its sovereign debt, which has become a sensitive issue following widespread protests over tax increases in 2024.

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.

International relations expert Peter Kagwanja explained that this model aligns with discussions held at a 2024 summit in Beijing, where African leaders and Chinese officials agreed to prioritize investments over debt. While the funding structure has changed, the China Road and Bridge Corporation remains the primary contractor for the extension. This follows a broader trend where Beijing has pledged $50 billion in credit and investments to the continent over the next three years.

President William Ruto is scheduled to launch the construction at a ceremony in the Rift Valley. The move is part of a broader strategy by the Ruto administration to securitize revenue streams for infrastructure, as debt repayments currently consume a significant portion of the country's annual revenue. The project revival is seen as a critical step in maintaining Kenya's infrastructure momentum while navigating a restrictive fiscal environment.