Plans to connect Mombasa and Addis Ababa are near completion following a Ksh12 billion ($166 million) boost from the African Development Bank.
Kenya’s Ministry of Finance and the bank signed the agreement in Nairobi last week, that will help build a section of the road linking East Africa to the Horn.
The 123km stretch in northern Kenya, is part of the corridor connecting the region’s port city of Mombasa to Addis Ababa, Ethiopia’s capital.
Finance Minister, Uhuru Kenyatta said it will open up northern Kenya and increase trade across the border.
“The project’s initial phase has already begun and should be completed on schedule,” Mr Kenyatta said.
He added:“(The project) is aimed at improving the socio-economic status of people in the region — water wells will be drilled in communities along the route.”
The link will also slash the cost of doing business by road, cut travel time and boost traffic at the Mombasa port, as demand from traders in landlocked Ethiopia grows, Domina Buzingo, the bank’s representative in Kenya, said at the signing ceremony.
The Kenya-Ethiopia road is part of a mega project to connect Uganda, Kenya, Ethiopia and Djibouti.
The project extends to Uganda, Tanzania, Eritrea and Djibouti.
It involves the construction and tarmacking of 438km road sections including the 245km Merille River-Marsabit-Turbi road in Kenya and 193km Ageremariam-Yabelo-Mega section of the road in Ethiopia.
It also includes the construction of roadside socio-economic infrastructure, and a one-stop-border-post between Kenya and Ethiopia.
The Mombasa-Ethiopia road falls under the Trans-African Highway Network from Cairo to Cape Town, and runs from Kenya’s coast via Nairobi and the Ethiopian highlands to Addis Ababa.
It is a flagship regional integration project under the New Partnership for Africa’s Development infrastructure plan.
For landlocked Ethiopia, the road will provide an alternative outlet to the sea through Mombasa.
Ethiopia currently depends on the port of Djibouti and Somali’s port in Berbera.
The closer Eritrean ports remain closed to Ethiopians due to the incessant hostility between the two neighbours.
When complete, it is expected that annual trade will grow from $35 million to $175 million, which is a 500 per cent increase.
To date, AfDB has committed Ksh140 billion ($1.8 billion) to various development programmes in Kenya.
Currently, 18 projects are underway, including energy, health and agricultural schemes
The Tunis-based bank is also funding the Arusha-Namanga-Athi River road between Tanzania’s second largest city and Athi River, near Nairobi.
AfDB is also supporting the construction of the Nairobi-Thika Highway in Kenya, the Singida-Babati road in Tanzania and the road sector support project III in Uganda, that will improve access to Kiruhura, Ibanda and Kamwenge Districts in western Uganda.