Kenya Revives Plans for $13.8 Billion Railway Line to Ethiopia

Kenya plans to begin construction in 2025 of a $13.8 billion high-speed electric railway from its Indian Ocean port of Lamu to Ethiopia and South Sudan.

(Bloomberg) — Kenya plans to begin construction in 2025 of a $13.8 billion high-speed electric railway from its Indian Ocean port of Lamu to Ethiopia and South Sudan.

The 3,000-kilometer (1,864-mile) standard-gauge railway will link the new port to the central Kenyan town of Isiolo, and branch into three to Addis Ababa, Juba and Nairobi, according to the Lapsset Corridor Development Authority, the agency in charge of the project.

With a projected economic internal rate of return greater than 12%, the proposal is deemed viable, Lapsset said in an emailed response to questions. Kenya is raising $9 million for detailed feasibility and engineering studies from an African Union infrastructure fund.

The continental body considers the corridor a priority project to connect countries with economic output of $233 billion and about 200 million people.

The single-track rail is part of a bigger infrastructure plan known as the Lamu Port-South Sudan-Ethiopia Transport, or Lapsset, corridor that includes oil pipelines, a refinery, a power plant, roads and airports that could cost about $22 billion.

Transport Corridor

Initially conceived in the 1970s, Lapsset was meant to be a second transport corridor for Kenya but never materialized. Those plans were dusted off in 2008 and included in the so-called Vision 2030, a long-term development blueprint to transform Kenya into an industrialized economy.

So far, the country has completed three of 32 berths at the Lamu Port, an airport, and a road linking Isiolo to the Ethiopian border town of Moyale.

The planned railway will help cut Ethiopia’s dependence on Eritrean Red Sea ports of Assab and Massawa as well as Djibouti, while giving South Sudan an alternative to Port Sudan. Cargo-handling demand from Ethiopia and South Sudan is projected at 29 million tons by 2030 and 700,000 passengers are expected to use the railway annually, according to the agency.

The extensions to the Ethiopian and Kenyan capitals are projected to finish within five years. Work on the link to South Sudan will begin thereafter with completion expected in 2040, it said.

The Isiolo-Nairobi branch will integrate the Lapsset corridor with an existing 500-kilometer line between Kenya’s biggest port of Mombasa and the southwestern town of Naivasha.

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