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China-Africa relations
ChinaDiplomacy

Can Uganda’s Turkish move push China to return to Kenyan leg of major African rail link?

  • Uganda has signed on Turkish firm Yapi Merkezi to build its share of the four-nation railway, with UK Export Finance among the likely funders
  • Analysts say this makes a strong case for commercial viability, concerns over which saw China refuse to fund the remaining section in Kenya

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Kenya expects to have a feasibility study for the Naivasha-Malaba SGR line ready for Chinese lenders by July 1. The section from Mombasa to Kenyan capital Nairobi with an extension to Naivasha was completed in 2017. Photo: Xinhua
Jevans Nyabiage
Plans have been revived for a massive East African railway project linking the Kenyan port of Mombasa with neighbouring Uganda, Rwanda and South Sudan – but China may no longer be its main financier.
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China had initially agreed to bankroll the project under its multinational Belt and Road Initiative. State-owned Exim Bank had advanced US$5 billion to build the Kenyan section from Mombasa to the capital Nairobi with an extension to Naivasha, which was completed in 2017.

But that is where construction stopped, after Chinese lenders grew cautious over commercial viability concerns and wanted a new feasibility study done. Exim Bank of China also never released funds to build the Ugandan section after the Kenyan side stalled.

Uganda cancelled its US$2.4 billion deal with China Harbour Engineering Company in January following Exim Bank’s refusal to fund the project further.

The landlocked country has since contracted Turkish firm Yapi Merkezi to build the 273km (170 miles) standard gauge railway (SGR) section from the Kenyan border town of Malaba to Ugandan capital Kampala.

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Funding was expected from British export credit agency UK Export Finance and Standard Chartered Bank, Ugandan officials said.

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