Kenya will on Thursday restart construction of a long-delayed extension of its Standard Gauge Railway, reviving a multi-billion-dollar infrastructure project that had stalled for more than six years after funding from China slowed.
The railway, a flagship project under Beijing’s Belt and Road Initiative, was initially designed to connect the port city of Mombasa to neighbouring Uganda, forming a key corridor to boost regional trade and integration in East Africa.
Its first phase, linking Mombasa to the capital Nairobi, was completed in 2017. However, progress on subsequent phases stalled at Naivasha, leaving the railway more than 350 kilometres short of the Ugandan border and delaying plans for a seamless cross-border network.
The project ran into difficulty after China began scaling back lending for large infrastructure ventures across Africa in 2019, amid growing concerns about debt sustainability. The pause left Kenya grappling with how to complete one of its most ambitious transport projects without significantly increasing its already high debt burden.
To revive construction, the government has turned to a new financing approach centred on revenue securitisation. Under this model, funds will be raised using future income streams, including proceeds from a railway development levy charged on cargo transported along the existing line. The levy is expected to provide a steady pool of resources to support the extension.
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The shift reflects a broader strategy by Nairobi to reduce reliance on external borrowing at a time when public debt repayments consume a substantial portion of government revenue. Efforts to raise additional funds through higher taxes have previously sparked public backlash, underscoring the political sensitivity of fiscal reforms.
Despite the change in financing structure, Chinese firms will remain closely involved in the project. State-owned China Road and Bridge Corporation, which played a central role in earlier phases, is expected to continue as a key contractor.
The railway has frequently been cited by critics as a symbol of so-called “debt trap diplomacy”, a term used to describe allegations that Beijing extends large loans to developing countries for infrastructure projects that later prove difficult to repay. The Chinese government has consistently rejected such claims, arguing that its investments are mutually beneficial and support economic development.
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Analysts say the project’s revival has been facilitated by a shift in China-Africa relations, following a 2024 summit in Beijing where leaders agreed to prioritise investment partnerships over traditional debt-financed projects. The new approach aims to sustain infrastructure development while addressing concerns about rising debt levels across the continent.
Kenya’s renewed push also comes as the government seeks to unlock economic growth through improved logistics and transport links. Extending the railway towards Uganda is expected to lower the cost of moving goods, ease congestion on roads, and strengthen Kenya’s position as a regional trade hub.
President William Ruto is scheduled to officially launch construction at a ceremony near Naivasha later on Thursday, marking a significant step forward for a project that had long been in limbo.
