Rwanda, Uganda and Kenya officials to raise railway project funds in Beijing

The three regional countries behind the Northern Corridor Integration Projects Initiative (NCPI) have written to China seeking an appointment for a joint visit aimed at mobilising funds for the construction of the proposed standard gauge railway (SGR).
President Kenyatta speaks at the Heads of State Summit in Kigali at the weekend. (File)
President Kenyatta speaks at the Heads of State Summit in Kigali at the weekend. (File)

The three regional countries behind the Northern Corridor Integration Projects Initiative (NCPI) have written to China seeking an appointment for a joint visit aimed at mobilising funds for the construction of the proposed standard gauge railway (SGR).

Technical estimates put the total budget required for the project, from Mombasa to Kigali, at $14 billion, an amount Rwanda, Uganda and Kenya have agreed to source for collectively.

At the end of the 9th summit of the NCPI in Kigali at the weekend, the Presidents of the subscribing countries reviewed progress so far made toward the implementation of major projects such as the SGR.

President Paul Kagame and his counterparts Yoweri Museveni (Uganda), Uhuru Kenyatta (Kenya) and Salva Kiir (South Sudan) directed their respective ministers of finance and infrastructure to consolidate the projects’ financial needs and include them in the 2015/2016 Financial Budget.

The ministers were also directed to expedite a planned joint mission to China to source for financial support for NCPI projects with the SGR at the helm of the list.

“We have written to the Chinese government and we are waiting for communication setting the date for the planned visit,” said Amb. Emmanuel Hatega, Uganda’s national coordinator for the NCPI.

Speaking to The New Times, yesterday, Hatega said although a date is yet to be set, the intention is to have the mission to take place before the next NCPI summit slated for May in Uganda.

Monique Mukaruliza, the national coordinator for the NCPI, said Uganda, which is coordinating the visit to China, was tasked to lead the joint efforts to mobilise for funding.

Hatega declined to reveal details of the persons the joint delegation of ministers will meet in China but The New Times independently understands that they will be meeting executives of China’s Export-Import-Bank (Exim Bank).

Established in 1994, Exim is a state-owned Chinese bank whose mission is to promote foreign trade and investment as well as provide development assistance to countries in form of concessional funding.

Although observers say that the mission is unlikely to fail given China’s commitment to the region and Africa in general, Amb. Hatega said they are not taking anything for granted.

“We intend to approach the Chinese with strong and bankable project proposals in order to encourage funders, we need to have the project’s business plan ready and all the feasibility studies reports ready,” he said.

Project concept

Africa 50, a project by the African Development Bank (AfDB) aimed at mobilising private financing to accelerate the speed of infrastructure delivery in Africa, is in charge of developing the SGR project business plan.

Hatega said the business plan is a vital ingredient of the fundraising effort as it will show investors the viability of the project to inform their investment decisions.

Given that the $14 billion budget is a substantial amount, the partners also know that the Chinese may not wish to cover everything hence an attractive business plan showing the profitability of the SGR would also help to get some private investors aboard, according to some analysts.

Another challenge is that the feasibility studies for the various sections of the SGR are at different stages in different countries; Hatega said it’s hoped that they will all be complete by the time of the visit to China to enable conclusive discussions with the financiers.

Another pending item is the ratification of the SGR protocol by Kenya and South Sudan, which Hatega said must be concluded before the partners can head to China; ratifying the protocol means that the partners commit to the SGR project implementation and its requirements.

Rwandan engineers needed

The standard gauge railway is expected to connect Mombasa-Nairobi-Malaba-Kampala and finally Kigali covering a total distance of 2,935 kilometres, which, experts believe, will significantly ease transportation cost of goods incurred by land locked countries.

Construction works for the 380-mile stretch of the SGR from Mombasa port to Nairobi, reportedly started last year and according to Mukaruliza, the NCIP national coordinators recently visited the site to assess the progress.

The Permanent Secretary at the Ministry of Infrastructure, Christian Rwakunda, told The New Times, yesterday, that during the summit in Kigali, it was agreed that Rwandan engineers would be seconded for work on the Mombasa-Nairobi project to gain experience.

“We are currently recruiting engineers that will be sent to Kenya, these will gain experience that will be used later when it’s time to construct the Rwanda section of the railway,” said Rwakunda.

Asked how many Rwandan engineers are needed, he explained that Kenya has not given them a quota of how many engineers to send but added that the country has the numbers.

“They don’t have to be railway engineers, any trained engineers can go there and acquire skills for rail engineering,” he said.

In May, last year, Chinese Premier Li Keqiang visited Kenya and during his visit signed a deal with the Kenyan government in which China would provide up to 85 per cent of the estimated $3.8 billion needed to finance the Mombasa-Nairobi SGR section. Kenya would meet the rest.

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