China has pledged to boost the extension of the Standard Gauge Railway construction project in Kenya from the capital Nairobi to the Rift Valley. Kenya will receive a $1.5 billion loan from China
Statehouse Spokesman Manoah Esipisu confirmed the news and said that Kenya will finance 15% towards the project while the rest will be from China Eximbank.
“Kenya and China signed a financing package for the extension of SGR, China Eximbank will provide a US$1.5bn loan, 85 percent of the financing, while Kenya will provide the balance,” he said.
The rail is projected to be extended to Naivasha and will offer access to an industrial park to be set up there so as to accommodate manufacturing firms wishing to use power from the nearby geothermal steam fields that are being developed.
The agreement was signed on the sidelines of the Forum for China-Africa Co-operation, which was recently held in Johannesburg.
The Standard Gauge Railway construction project in Kenya remains the single largest investment in the country’s economy in the last five decades.
Apart from the above deal, Kenya Railways and China Communications Construction Company Ltd have also signed a pact to carry out feasibility studies and initial designs for the second leg of the Mombasa-Nairobi line, which will stretch to Malaba on Kenya’s border with Uganda.
China Eximbank is one of three institutional banks in China chartered to implement the state policies in industry, foreign trade, diplomacy, economy, and provide policy financial support so as to promote the export of Chinese products and services. Established in 1994, the bank is subordinated to the State Council.