Kenya is preparing to raise $4 billion to extend its Standard Gauge Railway (SGR) from Naivasha to Kisumu and Malaba, using funds generated from the 2% Railway Development Levy on imports, which brings in around KES 50 billion ($387 million) annually. The SGR, completed in 2019 at a cost of $5 billion, is Kenya’s largest infrastructure project since independence. It connects Mombasa port to Naivasha via Nairobi, improving the movement of goods and passengers across the country and reducing reliance on road transport. The planned extension aims to strengthen regional trade by linking Kenya to South Sudan, Ethiopia, and the Democratic Republic of the Congo, making freight operations more commercially viable while fostering economic growth and job creation.
In addition to government-led operations, Kenya is exploring a partnership with Etihad Rail to manage freight services along the extended line. Etihad Rail requires a minimum of 17 million tons of annual freight to justify investment, and part of the plan includes transporting about 3 million tons of crude oil each year from Kenya’s northern oilfields. The extension is expected to enhance efficiency, reduce transport costs, and attract private investment to the region. Beyond freight, the SGR expansion will support broader economic development by improving connectivity, facilitating trade, and creating opportunities for businesses along the corridor. With proper planning, the project could also promote tourism, strengthen regional integration, and offer a reliable alternative to road transport, reducing congestion and road accidents.
This initiative demonstrates Kenya’s commitment to modern infrastructure and regional trade, positioning the country as a transport hub in East Africa. By leveraging public funding through the import levy and exploring private partnerships, the SGR extension promises to deliver long-term benefits for Kenya’s economy, its citizens, and neighboring countries, paving the way for sustainable growth and development in the years to come.