The project, split into two phases, will be financed by the partners through a mix of debt and equity using a model that is gaining traction after China’s traditional lending model raised concerns over borrowers’ debt burdens.

“We don’t have any room to borrow any more money,” Kefa Seda, Director General of the Public-Private Partnerships directorate at Kenya’s Finance Ministry told Reuters ahead of the official launch ceremony.

The project will improve a key transport corridor that links Kenya’s port of Mombasa with its western region and neighbouring landlocked states like Uganda, via Nairobi.

After pumping billions of Dollars into infrastructure projects, China cut its lending in Africa around 2019 as worries grew over debt sustainability in countries like Kenya.

Beijing pledged $50 billion in credit and investments over three years; however, at a summit with African leaders last year, it moved to reposition itself on the continent.

–Reuters–