Sh16.5 billion allocated to extend SGR from Naivasha to Uganda border
The total projected cost of extending the SGR from Naivasha to Kisumu is Sh380 billion, while the final section from Kisumu to Malaba, which borders Uganda, will require an additional Sh122.9 billion.
Kenya’s ambitious plan to extend the Standard Gauge Railway (SGR) closer to Uganda has taken a step forward, with the Treasury allocating Sh16.5 billion to fund the project’s first phase.
This is the first time the government has allocated funds for the 369-kilometre rail extension from Naivasha to Kisumu and Malaba, bringing the seamless rail connection between the Mombasa port and Uganda closer to reality.
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Budget documents tabled in Parliament reveal that this allocation will be complemented by funding from China, marking a significant milestone in a project that aims to boost the economic viability of the SGR. The extended rail line is key to improving cargo movement between Kenya and Uganda, as well as onward to South Sudan, the Democratic Republic of Congo, and Rwanda.
The extension of the rail line, however, has been delayed for years due to financing challenges. There were growing concerns that the failure to extend the SGR to the border town of Malaba had undermined the economic potential of the railway, particularly as Uganda relies heavily on the Mombasa port for imports.
“The last 40 per cent of the SGR line will be built by a consortium of Chinese companies. They will charge for the use of the railway line,” Treasury Cabinet Secretary John Mbadi recently told Members of Parliament.
The timeline for the completion of the SGR extension, however, remains undisclosed.
Kenya and China have agreed that each government will contribute 30 per cent of the required funding, with the remaining 40 per cent to come from a joint venture between Chinese and Kenyan banks. The agreement was finalised during President William Ruto’s four-day visit to Beijing last month.
The total projected cost of extending the SGR from Naivasha to Kisumu is Sh380 billion, while the final section from Kisumu to Malaba, which borders Uganda, will require an additional Sh122.9 billion.
China’s refusal to provide a full loan for the extension has spared Kenyan taxpayers from incurring further debt, as loan repayments to China currently account for a substantial portion of the country’s foreign debt.
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