Kenya to Raise $4B for Railway Expansion, in Talks With Etihad Rail for Freight Operations
Kenya plans to raise $4 billion by securitising an import levy to fund the extension of its China-built standard gauge railway (SGR) and is in talks with Etihad Rail to operate freight services, Transport Secretary Davis Chirchir announced.
Under the plan, Kenya Railways Corp. will oversee engineering and maintenance, while private operators—including Etihad Rail—would run freight services.
The government envisions extending the network into South Sudan, Ethiopia, and the Democratic Republic of the Congo, making freight operations more commercially viable.
Etihad Rail, which requires freight volumes of at least 17 million tons annually to justify investment, is considering transporting up to 3 million tons of crude oil per year from Kenya’s northern oilfields.
Alongside the railway project, Kenya has revived efforts to expand Nairobi’s Jomo Kenyatta International Airport (JKIA). The $2 billion plan includes building a new terminal and refurbishing the runway.
This comes just nine months after Nairobi canceled a deal with India’s Adani Group following legal troubles involving its founder.
The government has since approached international lenders—including China Exim Bank, Japan’s JICA, Germany’s KfW, the European Investment Bank, and the African Development Bank—to help finance the project. Construction could begin before the end of the year.
To ease rising public debt while financing infrastructure, Kenya will also issue a 175 billion-shilling ($1.36 billion) securitised bond next month to fund road construction.
The bond proceeds will repay $530 million in bridge financing already secured from a syndicate of lenders including TDB, KCB, and Absa.
Half of the bond will be issued in local currency and the other half in US dollars.
