China to Finance Railway Line Connecting East African Cities

May 11, 2014 7:46 am ET

(Updates with cost of project in second paragraph.)

May 11 (Bloomberg) -- China agreed to help fund the construction of a railway line linking the Kenyan port city of Mombasa to Uganda, Rwanda, Burundi and South Sudan.

China Exim Bank will provide 90 percent of the $3.8 billion cost of the project and Kenya will finance the remainder, according to an e-mailed statement from the office of the East African nation’s president. The first part of the line will be a 609-kilometre (378 mile) railway joining Mombasa with the Kenyan capital, Nairobi.

The planned railway line will be Kenya’s largest post- colonial project and should “eventually unify all of East Africa,” President Uhuru Kenyatta said at today’s signing ceremony in Nairobi. Kenya, East Africa’s biggest economy, has a single-track railway line built by colonial power Britain shortly after the turn of the 19th century.

“This is indeed a major undertaking that will boost the connectivity and integration of the East African sub region,” Chinese Premier Li Keqiang said. China Communications Construction Co. will be the lead contractor of the project.

Construction of the first part of the line will start in October and take 42 months to complete, Kenya’s presidency said on its Twitter page.

Kenya’s government will allocate 49 billion shillings ($560 million) for the project, while additional money will be spent to acquire land and build an inland container depot in Nairobi, Treasury Secretary Henry Rotich said in January. He said at the time the cost of the project would be 448 billion shillings.

Transport ministers of South Sudan, Uganda, Rwanda and Kenya also agreed to develop and operate a standard gauge railway at today’s event in Nairobi.