At a Glance
- Kenya begins a $1.5 billion highway upgrade with two Chinese state-owned firms to modernize critical transport routes.
- The project includes widening Mombasa-Nairobi roads and connecting western regions, improving trade and reducing congestion.
- Construction spans two phases with a mix of 75% debt and 25% equity; Chinese firms will operate highways under a 28-year toll concession.
Kenya is set to break ground this Friday on a $1.5 billion highway expansion, partnering with two Chinese state-owned companies in a major effort to modernize its transport infrastructure.
The project signals Beijing’s renewed focus on strategic African corridors after a pause in large-scale infrastructure investment.
Officials say the highway initiative will be funded through a mix of debt and equity, reflecting a cautious approach to borrowing amid rising concerns over unsustainable debt levels.
“We don’t have any room to borrow any more money,” Kefa Seda, director general of the Public-Private Partnerships Directorate at Kenya’s Finance Ministry, told Reuters ahead of the launch.
The expansion targets a key corridor linking Mombasa, the country’s main port, to Nairobi and onward to Kenya’s western regions and neighboring landlocked nations such as Uganda.
By widening single-lane roads into four- and six-lane dual carriageways, the project aims to reduce congestion, lower transport costs, and support trade flows across East Africa.
A strategic pivot toward China
After years of heavy infrastructure lending across Africa, China scaled back its financing around 2019 amid concerns over debt sustainability.
Last year, Beijing pledged $50 billion in new credit and investments at an African leaders’ summit, marking a strategic return to the continent.
The highway project follows Kenya’s earlier termination of a contract with a French consortium, highlighting Nairobi’s growing preference for Chinese partners.
Project phases and financing
Phase one, valued at $863 million, will see China Road and Bridge Corporation collaborate with Kenya’s state pension fund, NSSF, to upgrade 139 kilometers of highway.
Phase two, costing $678.56 million, will involve Shandong Hi-Speed Road and Bridge International expanding 94 kilometers into six-lane carriageways.
Funding is structured with 75% debt and 25% equity, with NSSF contributing nearly half of the equity in the first phase.
Construction is expected to finish by the end of 2027. After completion, the Chinese firms will operate the highways under a 28-year toll concession to recoup investments.
Analysts say the project could improve Kenya’s export links to Asia while modernizing the country’s transport backbone.
