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$13.8 Billion 3000-Kilometre Kenya-Ethiopia Railway Construction Agreement Signed

The Kenya-Ethiopia Railway construction project took a major step as the Kenyan Cabinet Secretary of Transport Kipchumba Murkomen and the Ethiopian Minister of Transport Dr. Alemu Sime have just recently signed a bilateral agreement that will foresee the construction of the   $13.8 billion 3000 kilometers electrified Standard Gauge Railway that will run from Lamu Port based in Kenya all the way to Addis Ababa Ethiopia.

This railway line will form a part of the project to establish the Lamu Port-South Sudan-Ethiopia (Lapsset) transport corridor which its focal point is the Lamu Port. The railway is expected to run to Isiolo from Lamu, A 200-kilometre part of it shall run to the city of Nairobi which shall then be divided into three branches that will run towards Addis Ababa, Nairobi, and the capital city of South Sudan, Juba.

Also read: $13.8 Billion Kenya-Ethiopia Railway Construction Plans Resume

Murkomen stated that they were currently putting efforts into the development of the railway line that runs from Lamu to Moyale via Isiolo town which will have a link that will run from Isiolo to Nairobi to link with the Mombasa-Nairobi-Malaba SGR. Murkomen also said that they had reached an agreement that they would set up a bilateral steering committee that would consist of officials from both of the countries whose responsibility would be to fast-track the development of the Lapsset Corridor and also provide support to its infrastructure.

Kenya-Ethiopia Railway Construction Progress

So far only three berths have been fully completed at Lamu which went at a total cost of $400 million. Kenya has shown keenness in developing Lamu Port which will be essential in handling goods that have been imported and are expected to be transported to the southern region of Ethiopia.

The construction works of the new railway line project are anticipated to kick off in the year 2025 and are going to cost a total of $13.8 billion and the line is expected to have an internal rate of return of 12 percent. This return of return was revealed by the Lapsset Corridor Development Authority (LCDA). The two countries of Kenya and Ethiopia have now gone in search of funds in order to finance their project. Currently, Kenya is searching for $9 million from the African Union Infrastructure Fund that will be utilized for feasibility studies to find out the economic and technical feasibility of constructing the new railway line.


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