Kenya has restarted construction of its multibillion-dollar railway extension after a six-year pause, reviving a project that had stalled when Chinese funding declined. The line, which initially connected Mombasa to Nairobi, is now set to extend toward Uganda, restoring plans for regional trade integration.
The revived project introduces a new financing approach centred on revenue securitisation, using proceeds from a railway development levy as seed funding. While China remains involved through the China Road and Bridge Corporation as contractor, the model reflects a shift away from heavy sovereign borrowing toward risk-sharing and investment-based partnerships. This follows broader adjustments in China’s engagement strategy across Africa.
The move comes amid Kenya’s constrained fiscal space, with rising debt servicing limiting borrowing capacity. By leveraging internal revenue streams, the government aims to sustain infrastructure expansion while reducing debt pressure. The completed extension to the Ugandan border is expected to significantly enhance regional connectivity, trade flows, and economic integration in East Africa.
