Kenya turns to UAE for railway funds after China cut financing

Kenya has started discussions with the United Arab Emirates to secure financing to complete a regional railway, President William Ruto said, after China cut infrastructure funding to the project.

The railway connecting the Kenyan port of Mombasa with landlocked neighbours, as part of China's Belt and Road Initiative, ended in the Rift Valley in 2019, 468 kilometres short of the border with Uganda, after Beijing withdrew support.

"We are exploring a partnership agreement with the United Arab Emirates to extend the Standard Gauge Railway to connect Kenya, Uganda and South Sudan," Ruto said on X late on Tuesday, after meeting UAE officials in Abu Dhabi.

Both sides will carry out a feasibility study on the extension of the railway, he said, "due to its capacity to foster regional integration and promote trade".

Ruto's office did not respond to Reuters' request for more details.

Ruto, who took over in September 2022, has pursued closer ties with the UAE, and Kenya is also finalising a $1.5 billion (Ksh.194.2 billion) commercial loan from the UAE for budget support.

The East African nation and the UAE signed a comprehensive economic partnership agreement on Tuesday, aiming to boost trade volumes by removing barriers, simplifying customs processes and promoting investments.

"Kenya is going to be a gateway for sure for East Africa," Thani Al Zeyoudi, the UAE's minister of trade, told Reuters on Tuesday.

Trade between Kenya and the UAE has more than doubled over the last decade, Ruto's office said. The UAE is the sixth biggest export market for Kenyan goods, and its second biggest source of imports.

The value of the trade stood at 445 billion shillings ($3.44 billion) in 2023, with the UAE buying agricultural products, while Kenya gets petroleum products, machinery and chemicals.

The UAE's Abu Dhabi National Oil Company (ADNOC) and Emirates National Oil Company were among three Gulf firms Ruto's government picked in 2023 to supply Kenya with oil on longer credit terms, in a shift from an open tender system.