Kenya to resume talks with China on funding SGR to Uganda Border
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Kenya seeking favourable terms with China on funding SGR to Uganda Border ahead of talks
Kenya seeking favourable terms with China on funding SGR to Uganda Border ahead of talks.
Eight years after the initial round of negotiations, Kenya announced it intends to start up again with China about financing an extension of a railway line to the Uganda border.
Kenya built a 730-kilometer (453-mile) railroad from the port of Mombasa on the Indian Ocean to Naivasha with Chinese financial assistance.
Kenya is currently updating the feasibility study of extending the line to the Ugandan border, Kipchumba Murkomen, cabinet secretary at Kenya’s Ministry of Roads and Transport, told reporters in Kampala, Uganda’s capital.
The study will be ready by July 1, he said.
Kenya will seek favorable terms, including concessional funding, grants, and long-tenure debt, during the negotiations with the Export-Import Bank of China, he said.
The line is expected to go through the Lake Victoria port of Kisumu. Murkomen said he didn’t have details of the cost.
Delay in finalizing the plan prompted Uganda to terminate a contract with a Chinese company to build its own rail line from the border to Kampala.
Chinese lenders refused to fund the project for more than eight years demanding that the two railroads be synchronized.
Uganda’s talks with Turkey’s Yapi Merkezi to develop the line are at an advanced stage and a contract will be signed “soon” for the Kampala-Malaba stretch with construction expected to start in December, Fred Byamukama, Minister of State for Works and Transport told reporters on Friday.
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The cost of the 271-kilometer railroad will be determined after the contractor submits its bid, he said.
This comes after reports that Kenya and Uganda will seek an alternative financier for Standard Gauge Railway (SGR) project to connect Naivasha and Kampala via Malaba, officials said this week.
“Sourcing for alternative financing from Europe is ongoing,” Uganda’s Ministry of Works and Transport said on Thursday. He did not name which specific European funders Uganda was wooing.
A senior Kenyan government official said that loan from China has remained high and Kenya is not willing to service any new loans from Beijing.
“We have been having talks with China, but it seems funds are not coming at the terms we were proposing. This cannot hold our project to ransom and,” we have to continue with our plan to build SGR to connect Naivasha and Kampala,” said the senior official.
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