Kenya and Uganda are seeking Sh850 billion from European and Gulf lenders to fund the construction of the Naivasha-Kampala standard gauge railway (SGR).
This comes barely two weeks after the two countries signed a deal to jointly seek funds for the project, which is expected to commence in January 2024.
According to a report by The EastAfrican, the UAE is being considered a suitable candidate since it has offered to upgrade the port of Mombasa, which serves as the main gateway for cargo destined for the Great Lakes region.
The UAE has reportedly dangled an offer to build the railway to Malaba as long as it is also allowed a significant stake in the port of Mombasa.
On the Ugandan side, UK Export Finance (UKEF) is expected to provide most of the funding for the Kampala-Malaba line.
Chinese, European, and Middle Eastern lenders are also reportedly interested in providing funds to extend the Ugandan SGR to Mpondwe at the border with the DRC, Mirama Hills to connect with Rwanda, and Elegu to South Sudan.
The fundraising deal signed in Mombasa on July 28 by Kenyan Transport Cabinet Secretary Kipchumba Murkomen and his Ugandan counterpart Katumba Wamala seeks to achieve seamless railway transport from Mombasa to Kampala.
Under the deal, Kenya will extend the SGR from Naivasha to Malaba – a distance of 368 km, while Uganda will build a 272 km railway from Malaba to Kampala.
“It is of great benefit for both countries if we extend the SGR to Kampala. We are working as a team to ensure that goods are not stuck at the Malaba border,” Murkomen said.
If the plan goes through, the contractor should be on site in December to extend the line from Naivasha to Kampala and later to Uganda’s frontier towns with Rwanda and South Sudan.
In November last year, Murkomen said the government viewed the extension of the SGR to Malaba as the best way to ensure the viability of the entire railway that runs from Mombasa to Naivasha.
“This project will only make sense when it goes past Naivasha as compared to the current situation where we are forced to transport goods by the lake instead of having them through the Kisumu port,” Murkomen said in an interview.
Phase 1 of the SGR project, running from Mombasa to Nairobi, was completed in 2017 at a cost of Sh327 billion, while Phase 2A from Nairobi to Naivasha was completed in 2019 at a cost of Sh150 billion.
Shortly before the completion of the Nairobi-Naivasha line, the government activated plans to extend the railway to Malaba on the Kenya-Uganda border.
Dubbed Phase 2B of the Kenya SGR project, the railway was to pass through Narok-Bomet-Kisumu, then from Kisumu through Yala to Bumula and Malaba.
It was to be built at a cost of $3.5 billion.
The project stalled after China declined to approve the loan and instead asked Kenya to conduct a commercial viability study on the Mombasa-Malaba railway.
