Kenya: China to Renew Funding For Naivasha-Kisumu Standard Gauge Railway (SGR)

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The government of China represented by the country’s Foreign Minister, Mr. Wang Yi, has hinted that it may renew funding of Phase 2B of Kenya’s Standard Gauge Railway (SGR), or rather the Naivasha-Kisumu Standard Gauge Railway.

Mr. Yi made the revelation during a tour of China-funded projects in Mombasa as part of his three-nation tour of Eritrea, Kenya, and Comoros. He said that the SGR project has been prioritized for completion as an element of a master plan for transport infrastructure in the Horn of Africa.

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Under the master plan, Kenya’s SGR will be extended from Naivasha to Uganda, Rwanda, South Sudan, and eventually to the Democratic Republic of Congo, while the Addis-Ababa-Djibouti railway will be extended to five other neighboring countries including Eritrea.

This, according to the Chinese Foreign Minister is all in a bid to help the region accelerate the construction of industrial and economic belts that will subsequently create more jobs for the region.

Cancelation of the previous request to China by Kenya to fund Naivasha-Kisumu Standard Gauge Railway

As a recap, Kenya borrowed approximately US$ 3bn from China to build the 472km railway from Mombasa to Nairobi, and US$ 1.5bn for the 120km Nairobi-Naivasha line.

However, in September 2018 when the East African country approached the Asian counterpart for the third round of funding for the Naivasha-Kisumu SGR, the latter declined to approve the loan.

Reportedly, Chinese Premier Xi Jinping asked the parties involved to defer making the approval until the East African country undertook a commercial viability study on the entire Mombasa-Kisumu railway.

It later turned out that the Asian country declined to make the approval as part of its policy changes that sought to manage debt default risks by countries or projects.

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