The Cabinet Secretary for Roads and Transport, Davis Chirchir witnessed the signing of an addendum to the commercial contract for the construction of the Naivasha–Kisumu Standard Gauge Railway (SGR) Phase 2B, marking a key milestone in the revival of the long-awaited project.
The addendum was signed by Kenya Railways Managing Director Philip Mainga and Yu Xiao Dong, representing China Communications Construction Company.
According to CS Chirchir, the revised agreement aligns with Cabinet approval to finance the project through alternative funding mechanisms, notably the securitization of a portion of the Railway Development Fund.
He said the move reflects the government’s commitment to delivering strategic transport infrastructure while maintaining fiscal discipline.
“This approach demonstrates our resolve to advance critical connectivity projects in a financially responsible manner,” Chirchir noted, adding that the new financing model allows the government to spread risk while unlocking faster project delivery.
Officials said the alternative financing framework is expected to improve project sequencing, accelerate implementation timelines and enhance oversight, while strengthening risk-sharing arrangements between the public sector and private partners.
Once completed, the Naivasha–Kisumu SGR Phase 2B will extend the standard gauge network to western Kenya, significantly improving regional connectivity along the Western Corridor.
The line is expected to reduce transportation and logistics costs, stimulate trade, and deepen economic integration between Kenya and the wider East African region.
On December 15, 2025, the Cabinet endorsed the National Infrastructure Fund (NIF) and the Sovereign Wealth Fund (SWF) under the Sh5 trillion national development plan.
The National Infrastructure Fund will mobilise domestic resources, monetise mature public assets, and attract private sector investment.
Privatisation proceeds will be ring-fenced and invested in infrastructure projects that generate long-term value.
Each shilling invested through the fund is expected to leverage up to ten shillings from long-term investors, including pension funds, private equity funds, sovereign partners, and development finance institutions.
The Sovereign Wealth Fund will manage revenues from mineral and petroleum resources, dividends from public investments, and a portion of privatisation proceeds. Its focus will be on inter-generational savings, protection against external shocks, and strategic investments that deliver commercial returns.
Together, the NIF and SWF will support Kenya’s wider transformation agenda.
Plans include modern irrigation, energy expansion, upgrading roads and highways, and extending the SGR to Malaba.
The government also aims to modernise ports and airports, and increase energy generation by 10,000 megawatts over seven years through geothermal, hydro, solar, wind, and nuclear power.
President William Ruto defended the development strategy, saying it was realistic and necessary for growth. He highlighted the government’s plan to build 28,000 kilometres of roads by 2032, in addition to the 10,000 kilometres constructed under the previous administration.
Some lawmakers, including Kiharu MP Ndindi Nyoro, have called for accountability on previously borrowed funds before launching new projects.
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