KENYA has initiated discussions with the United Arab Emirates (UAE) to secure financing for the stalled extension of its Standard Gauge Railway (SGR), President William Ruto revealed. The move comes after China withdrew funding for the infrastructure project, which was originally part of Beijing’s Belt and Road Initiative (BRI), according to Reuters.
The railway, designed to connect the port of Mombasa with landlocked neighbours Uganda and South Sudan, currently ends in the Rift Valley, falling 468 kilometres short of the Ugandan border. The project came to a halt in 2019, when China stopped further financial support.
Kenya turns to UAE for funding
Speaking on X (formerly Twitter) late Tuesday, Ruto stated that Kenya is ‘exploring a partnership agreement with the United Arab Emirates to extend the Standard Gauge Railway to connect Kenya, Uganda, and South Sudan.’ The two countries have agreed to conduct a feasibility study on the railway’s expansion, citing its potential to enhance regional integration and boost trade.
Ruto’s office did not provide further details on the financial structure or timeline of the proposed deal.
Strengthening Kenya-UAE ties
Since taking office in September 2022, President Ruto has actively sought closer economic ties with the UAE. In addition to railway talks, Kenya is finalising a $1.5bn commercial loan from the Gulf nation for budget support, Reuters reported.
On Tuesday, Kenya and the UAE signed a Comprehensive Economic Partnership Agreement (CEPA) to increase trade volumes, remove barriers, simplify customs procedures, and encourage investments. UAE’s Minister of Trade, Thani Al Zeyoudi, hailed the agreement, saying, ‘Kenya is going to be a gateway for sure for East Africa.’
Kenya-UAE trade on the rise
Over the last decade, trade between Kenya and the UAE has more than doubled, according to Ruto’s office. The UAE is now Kenya’s sixth-largest export market and second-largest source of imports.
In 2023, total trade between the two nations was valued at KSh445bn ($3.44bn). The UAE primarily imports Kenyan agricultural products, while Kenya relies on the Gulf nation for petroleum products, machinery, and chemicals.
UAE’s role in Kenya’s energy sector
The Abu Dhabi National Oil Company (ADNOC) and Emirates National Oil Company were among the three Gulf-based firms chosen by Ruto’s government in 2023 to supply oil to Kenya under long-term credit terms. This marked a shift from the previous open tender system, which had governed Kenya’s petroleum imports.
The future of the Kenya-UAE railway partnership
With China scaling back its infrastructure financing in Africa, Kenya’s pivot to the UAE signals a strategic shift in securing alternative funding sources for critical projects. If successfully implemented, the railway extension could unlock regional trade opportunities and further cement Kenya’s position as a key logistics hub in East Africa.
As both nations continue discussions, the success of this partnership could set a precedent for new infrastructure collaborations between African nations and Gulf investors.
