Kenya Runs to UAE for Uganda SGR Extension in $4 Billion Deal

Kenya plans to raise $4 billion by securitising revenue from its import levy to finance the extension of the Standard Gauge Railway (SGR).

The country is already in talks with Etihad Rail to operate freight services, Transport Cabinet Secretary Davis Chirchir has said.

Etihad Rail is the developer and operator of the United Arab Emirates’s national railway network

Kenya intends to channel proceeds from the railway development levy — a 2% tariff on imports that generates about Ksh.50 billion ($387 million) annually — towards extending the SGR from Naivasha to Kisumu and on to Malaba at the Ugandan border.

Also Read: Uganda Signs $800 Million 3-yr SGR Deal with Islamic Bank

SGR was completed in 2019 at a cost of $5 billion, the SGR links Mombasa port to Naivasha via Nairobi and remains Kenya’s largest infrastructure project since independence.

Under the expansion plan, Kenya Railways Corporation will handle engineering and maintenance, while private operators will manage train services.

The government’s long-term vision is to extend the rail network into South Sudan, Ethiopia, and the Democratic Republic of the Congo to enhance commercial viability.

Etihad Rail, which has set a threshold of at least 17 million tons of freight annually for investment, is considering transporting around 3 million tons of crude oil each year from Kenya’s oilfields as part of the deal.