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Kenya signs $5.42 bln railway extension deal with Chinese firm

31 March 2016, 08:41

Nairobi - (Reuters) - Kenya signed a multi-billion dollar agreement with China Communications Construction Company (CCCC) to extend the country's rail network, adding to a swathe of infrastructure deals in Africa won by Chinese firms.

The first phase of a cross-country rail project in East Africa's largest economy, and thence to other countries in the region, is expected to link the Indian Ocean port of Mombasa to Nairobi from mid-2017.

In December the government, seeking to reduce transport costs and boost trade, secured a $1.5 billion loan -- also from China -- to extend the track from the capital to the Rift Valley town of Naivasha.

Wednesday's deal with CCCC, worth 549 billion shillings ($5.42 billion), is to extend the line from Naivasha to the town of Malaba on the Ugandan border, said Wilson Nyakera, principal secretary in Kenya's transport ministry.

China has replaced the U.S. and Europe as the main trading partner for many African countries and has bankrolled projects from infrastructure to energy as part of its growing commercial and diplomatic clout on a continent with some of the fastest-growing economies.

The government expected to conclude a financing agreement for the Naivasha-Malaba leg in the next six months, Nyakera said.

"Even as we sign the commercial contract for the second phase we are confident that we will be able to deliver the project," Transport Minister James Macharia was quoted as saying in a Kenya Railways statement.

Kenya, Uganda, Rwanda and South Sudan have ratified a plan for a railway connecting Mombasa to Kampala, Kigali and Juba.

($1 = 101.3000 Kenyan shillings)

(Reporting by Wendell Roelf; editing by John Stonestreet)

- Reuters


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