Kenya has turned to the UAE for railway funding following China’s decision to cease financing

President William Ruto announced that Kenya has initiated negotiations with the United Arab Emirates to secure financing for the completion of a regional railway, following China’s reduction in infrastructure funding for the project.

In 2019, the railway that connected the Kenyan port of Mombasa with landlocked neighbors, as part of China’s Belt and Road Initiative, reached the Rift Valley, only 468 kilometers (290 miles) from the Ugandan border, after Beijing withdrew its support.

“We are in the process of examining a partnership agreement with the United Arab Emirates to expand the Standard Gauge Railway to connect Kenya, Uganda, and South Sudan,” Ruto stated on X late on Tuesday, following a meeting with UAE officials in Abu Dhabi.

He stated that “due to its capacity to promote trade and foster regional integration,” both parties will conduct a feasibility study on the railway extension.

Ruto’s office did not respond to Reuters’ request for additional information.

Kenya is in the process of finalizing a $1.5 billion commercial loan from the UAE for budget support, and Ruto, who assumed the presidency in September 2022, has pursued closer relations with the UAE.

On Tuesday, the United Arab Emirates and the East African nation executed a comprehensive economic partnership agreement with the objective of increasing trade volumes by eliminating obstacles, streamlining customs procedures, and encouraging investments.

Thani Al Zeyoudi, the UAE’s minister of commerce, stated to Reuters on Tuesday that Kenya will undoubtedly serve as a gateway to East Africa.

According to Ruto’s administration, trade between the United Arab Emirates and Kenya has increased by more than twofold in the past decade. Kenya’s sixth-largest export market and second-largest import source are the United Arab Emirates.

In 2023, the UAE purchased agricultural products, while Kenya acquired petroleum products, machinery, and chemicals, resulting in a trade value of 445 billion shillings ($3.44 billion).

In 2023, Ruto’s government selected three Gulf firms to supply Kenya with oil on extended credit terms, in a departure from an open tender system: the UAE’s Abu Dhabi National Oil Company (ADNOC) and Emirates National Oil Company.

($1 is equivalent to 129.2500 Kenyan shillings)