Kenya Seeks Chinese Panda Bond to Restart Railway Expansion

Kenya plans to issue its first Panda bond to raise funds for the stalled 475 km Standard Gauge Railway extension toward the Ugandan border, aiming to reduce logistics costs and improve trade access. This is reported by the railway transport news portal Railway Supply.

Treasury Director General John Mbadi confirmed the financing plan following President William Ruto’s recent visit to China. Kenya expects to diversify its funding sources and lower dependency on global lenders.

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Kenya Explores Panda Bond to Fund Railway Link

The bond proceeds will support the rail link from Naivasha to Malaba, helping connect the SGR to Uganda’s capital, Kampala. This could significantly lower transportation costs and reduce delays at the Malaba border crossing.

Kenya also seeks to strengthen the port of Mombasa as a major trade hub for East Africa. A more efficient railway could expand access for Uganda, Rwanda, Burundi, Zambia, and the Democratic Republic of the Congo.

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But competition is rising. Tanzania is upgrading its own ports and rail systems through Dar es Salaam, offering alternate trade routes to the same landlocked countries.

Uganda currently ships about 80% of its imports through Mombasa using trucks, which are expensive, slow, and damaging to roads. Due to SGR delays, Uganda has begun exploring new links through Lake Victoria to Tanzania’s Mwanza port.

Kenya’s use of a Panda bond marks a strategic shift in infrastructure financing. If successful, it could encourage other African nations to access Chinese capital and speed up regional integration.

Source, photo: www.ecofinagency.com

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