• Kenya eyes Chinese bond market to finance 475 km railway extension
• SGR expansion to Uganda delayed due to lack of funding
• Project aims to cut logistics costs and boost Mombasa’s regional role

Amid ongoing budget constraints, Kenya is seeking new funding options for its Standard Gauge Railway (SGR) expansion by turning to the Chinese financial market. The government has initiated steps to issue its first Panda bond, with proceeds to support the long-delayed extension of a 475 km railway stretch toward the Ugandan border.

The initiative was confirmed by Director General of the Public Treasury John Mbadi and follows President William Ruto’s visit to China in April. The proposed bond issuance is part of a wider strategy to diversify external financing sources. According to local media reports, the financing arrangement will include additional contributions from the Kenyan government.

The extension project aims to link Naivasha to Malaba, on the border with Uganda, ensuring a seamless standard-gauge connection to Kampala. This would reduce logistics costs between the port of Mombasa and the East African interior, ease congestion at the Malaba border crossing, and limit reliance on costly and time-consuming road transport.

Once completed, the expanded rail line would strengthen Mombasa’s position as a hub for regional transit trade to landlocked countries including Uganda, Rwanda, Burundi, the Democratic Republic of the Congo, and Zambia. These same countries are also being targeted by Tanzania’s port and railway expansion projects based out of Dar es Salaam.

Uganda, which channels nearly 80% of its cargo through Mombasa, remains heavily dependent on trucks for freight transport. This mode contributes to high costs, unpredictable transit times, and road degradation. As delays in Kenya’s SGR extension persist, Uganda has explored alternative export corridors, such as rail links to the Tanzanian port of Mwanza on Lake Victoria.