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New Silk Road Finance Awards

Middle East and Africa: Best Individual BRI Project or Initiative in the Region 2017

Nairobi-Mombasa railway (lead bank: Export-Import Bank of China)

Standing out as Asiamoney’s best Belt and Road project in the Middle East and Africa is the new standard gauge railway line between Nairobi and Mombasa. The railway line opened in June this year and is financed by China Exim Bank and the Kenyan government. It was built by China Road and Bridge Corporation and the Chinese state-owned enterprise will operate the railway for the first five years.

The $4 billion Madaraka Line – named after Madaraka Day, when Kenya celebrates attaining self-rule in 1963 – is Kenya’s most expensive infrastructure project since independence, and replaces the decrepit Lunatic Express, a 600-mile railway built by British in the late 19th century.

Analysts argue that the railway has the potential to transform the lives of Kenyans and the fortunes of local businesses; it cuts the transport time between Nairobi and Mombasa from over 10 hours to just four and a half and provides quick access for Kenyan and East African goods destined for export.

The project also illustrates China’s shift from focusing on extracting natural resources in Africa to infrastructure developments with wider benefits.

Eventually, the railway will stretch through Uganda, Rwanda, Ethiopia and South Sudan, linking all of these countries to the Indian Ocean and so to China.

Despite initial hiccups, analysts highlight the long-term benefits, noting that effective and efficient connectivity in east Africa will boost trade and investment in the region and spur the development of a new generation of east African companies. When the time comes, these companies will be in need of local funding and advice, and the knock-on effects of the railway line for Kenya will be considerable.

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