Kenya’s plan to extend the standard gauge railway from Naivasha to Malaba has received a fresh financial boost, with the Treasury allocating an extra Sh14 billion.
The move underlines the government’s commitment to completing the railway to the Ugandan border and enhancing regional trade links. The supplementary budget presented to the National Assembly increases total funding for the line, which passes through Kisumu, to Sh30 billion for the current financial year ending June.
The original budget had set aside Sh16 billion for the project, highlighting a major increase to accommodate ongoing construction and preparatory activities.
The additional funding will be sourced from taxes on goods and services under the Appropriation-in-Aid system, rather than the Consolidated Fund, which is normally used for general revenue such as income tax and excise duties.
The Treasury estimates that the full cost of extending the railway, currently stopping in Suswa, Narok County, will reach Sh502.9 billion. Most of the financing, about Sh455.35 billion, is expected from undisclosed foreign investors, while the government is also pursuing a securitised bond of up to Sh390 billion to cover the Naivasha–Malaba section.
Officials describe this approach as a “creative financing” model designed to reduce reliance on new conventional external debt by leveraging projected future tax revenues.
Work on the project is already underway. The Kenya Railways Corporation has completed feasibility studies and started land compensation, planning to acquire over 5,000 acres to enable the railway’s expansion.
Completion of this segment is intended to address challenges faced by traders, who currently rely heavily on trucks due to the line ending abruptly at Suswa.
Meanwhile, Uganda has begun construction on its side of the line, connecting Tororo to the Kenyan border at Malaba. The expansion is expected to strengthen the SGR’s role in regional trade, though Uganda’s plan to extend its railway southwards to Mpondwe near the Democratic Republic of Congo border may create new competition for Mombasa port.
According to a Uganda Ministry of Works and Transport document cited by Reuters, “The main objective of the project is to connect the vast and mineral-rich regions of both countries (Uganda and Tanzania) to the port of Dar es Salaam ... whilst saving time and transportation costs.”
