Uganda seeks joint Exim Bank talks with Kenya on SGR funding

Saturday January 13 2018

UGANDA AND KENYA SGR

President Uhuru Kenyatta (right) welcomes his Ugandan counterpart Yoweri Museveni at State House on December 19, 2017. The two Heads of State agreed to fast-track the remaining sections of the standard gauge railway (SGR) by synchronising the financing.. PHOTO | SAMUEL MIRING'U | PSCU  

By JULIUS BARIGABA
More by this Author

Ugandan and Kenyan authorities are pushing for joint negotiations for the funding of the standard gauge railway, The EastAfrican has learnt.

Kampala, whose application to China’s Export and Import (EXIM) Bank is highly dependent on the treatment of Kenya’s application for funding of the different sections of the railway, has now asked Kenya for a joint mission to Beijing to meet officials of the bank to expedite the financial closure for the two countries’ multibillion-dollar projects.

The projects relate to the remaining sections: Naivasha-Kisumu-Malaba on the Kenyan side and Uganda’s 273km long Malaba-Kampala line that will cost $2.3 billion.

Officials in Kampala are banking on Kenya agreeing to the proposal of joint negotiations so that the teams can travel to Beijing to conclude financing details.

“We hope to go this month,” said Uganda SGR project co-ordinator Kasingye Kyamugambi.

The EastAfrican has seen a letter to Uganda’s High Commissioner to Kenya, dated January 5, 2018, proposing that the High Commissioner requests Nairobi for a “joint Uganda-Kenya engagement of the Chinese authorities and Exim Bank on the Standard Gauge Railway.”

The tone of the letter — signed by John L. Mugerwa on behalf of the Permanent Secretary of Uganda’s Ministry of Foreign Affairs — is in line with the meeting of presidents Yoweri Museveni and Uhuru Kenyatta on December 19, 2017 at State House, Nairobi, that proposed the Naivasha-Kisumu-Malaba and Malaba-Kampala legs of the SGR should be done concurrently.

During that meeting, the two heads of state also agreed to fast-track these sections by synchronising the financing and construction, and the two countries’ ministries of Transport followed this up by signing an agreement to this effect.

Construction of the $1.5 billion Nairobi-Naivasha leg is ongoing, leaving the sub phases of Naivasha-Kisumu and Kisumu-Malaba in Kenya and Malaba-Kampala on the Ugandan side for fast-tracking.

In the letter, also copied to Uganda’s ambassador to Beijing, Mr Mugerwa says Kampala wants to meet with the SGR financiers to “reiterate the commitment of both countries” as it is hoped that this visit would thrash out financing details and pave way for “timely implementation of the remaining sections and resolve any outstanding technical issues.”

Mr Mugerwa’s docket is to co-ordinate with ministries, departments and agencies to ensure timely implementation of the Northern Corridor Integration Projects (NCIP), which includes infrastructure like the SGR and energy interconnection.

By the time we went to press, the Kenyan High Commission had not responded to our questions on whether Nairobi had agreed to the proposed joint mission to Beijing.

However, in a previous interview, Kenya Railways managing director Atanas Maina said Kenya was yet to submit funding proposals for the Kisumu-Malaba section of its SGR as the government felt it needed to first finish the Naivasha-Kisumu phase.

Kampala is desperate to get the deal over the line so that construction of the Malaba-Kampala SGR phase can start, even as officials say that depending on other requirements that the Chinese might demand, the planned joint visit to Beijing may not guarantee financial closure.