Kenya Turns to UAE for Standard Gauge Railway Extension, Dumps China

Kenya is exploring a partnership with the United Arab Emirates (UAE) to extend the Standard Gauge Railway (SGR) from Naivasha to Malaba, marking a shift away from its previous reliance on Chinese funding, which has stalled.

The move aims to connect the line with Uganda’s railway and facilitate seamless regional integration.

Phase two of the SGR project, running from Naivasha to the Malaba border, is critical to linking Kenya’s railway network with Uganda and eventually South Sudan.

The extension is expected to enhance trade in the region by providing a modern and efficient transportation network.

During a visit to Abu Dhabi, Kenyan officials, led by President William Ruto, held talks with UAE Investment Minister Mohamed Hassan Alsuwaidi to discuss the project.

The discussions centred on conducting a feasibility study for the railway extension, highlighting its potential to boost regional trade and integration.

Kenya’s shift to the UAE comes after delays and unmet funding promises from China, which financed the first phase of the SGR from Mombasa to Naivasha.

The project has been hailed for boosting cargo transport but criticised for its high costs and debt burden.

The new partnership with the UAE reflects Kenya’s efforts to diversify its funding sources and strengthen economic ties with Gulf nations.

Uganda announced in May the commencement of construction of the SGR starting August, giving a lease of life for Kenya’s Ksh327 billion project whose viability was dependent on the Ugandan section. Kenya had ended its line in Naivasha for fears that Kampala could not develop the line from the border to its capital.

Uganda secured funds from the Standard Chartered Bank with a Turkish company getting the contract to construct the railway line after Kampala failed to get the money from China.

Earlier, Uganda was looking at China Exim Bank for funds to construct its section of the Malaba-Kampala railway under the northern corridor project that required all the member states to put up a modern railway line in their respective States.

Uganda’s willingness to put up a line from the Malaba border to Kampala was a prerequisite for Kenya to get more funds for the last leg of the railway line that would run all the way to the border town.

In 2014, leaders from Uganda, Kenya, Tanzania, South Sudan and Rwanda broke the ground for the construction of SGR to link the member states with the view of boosting trade in the region.

ligadwah@businessdayafrica.org