Kenya's Sh650B SGR expansion stalls as PPP funding remains uncertain

The Kenyan government has proposed extending the Standard Gauge Railway (SGR) to Naivasha, Kisumu and Malaba at an estimated cost of Sh650 billion. Since taking office in September 2022, the Kenya Kwanza administration has shifted the project's funding away from Chinese loans, opting instead for a public-private partnership (PPP) approach.

The SGR expansion was originally planned under previous financing agreements with China. However, after the Kenya Kwanza government assumed power, officials criticised the project for worsening the country's debt burden and economic pressures. Funding plans were revised to reduce reliance on foreign loans.

In 2023, the government signed a memorandum of understanding (MoU) with the African Development Bank (AfDB) to secure partial funding. Additional talks were held with the World Bank and the Japan International Cooperation Agency (JICA) to explore concessional loan options. Kenya also committed national funds through Infrastructure Bonds to support the project. Despite these efforts, construction remains stalled as of early 2026. The delay stems from unresolved investor commitments for the Naivasha-Kisumu-Malaba section. Concerns over the project's financial sustainability and long-term benefits continue to be raised by analysts and policymakers.

The SGR expansion now hinges on securing final investor agreements under the PPP model. If completed, the extended line would connect key regions, but funding uncertainties and economic concerns persist. The government has yet to confirm a definitive timeline for breaking ground.