Kenya broke ground Friday on a $1.5 billion highway expansion project in partnership with two Chinese state-owned companies, marking Beijing’s return to large-scale infrastructure investment in the East African nation after years of caution over debt sustainability, Reuters reports.
Fresh push for key trade corridor
The launch ceremony, held along the busy Nairobi-Nakuru route, signals a fresh chapter in China-Kenya ties. The upgraded corridor will connect the Indian Ocean port of Mombasa through the capital to western Kenya and landlocked neighbours such as Uganda, easing chronic congestion on one of East Africa’s most vital trade arteries.
President William Ruto described the project as a game-changer for regional trade and job creation. “Better roads mean faster movement of goods, lower costs for businesses and more opportunities for our people,” he said.
Two-phase expansion, new financing model
The work is split into two phases. China Road and Bridge Corporation (CRBC), teaming up with Kenya’s National Social Security Fund (NSSF), will widen 139 kilometres of existing single-lane road into four- and six-lane dual carriageways at a cost of USD 863 million. A second Chinese firm, Shandong Hi-Speed Road and Bridge International, will upgrade a 94-kilometre stretch to six lanes for USD 678.56 million. Both figures include financing costs.
Unlike earlier Chinese-funded projects that relied almost entirely on loans, this deal uses a hybrid model: 75% debt and 25% equity. The NSSF is putting in 45% of the equity for its section, while the debt is expected to come from Chinese commercial banks and policy lenders such as the Export-Import Bank of China.
Kefa Seda, head of public-private partnerships at the finance ministry, explained the shift bluntly: “We simply don’t have room to take on more traditional loans.” Kenya’s public debt already hovers around 70% of GDP, leaving little fiscal space for new borrowing.
Construction is due to finish by the end of 2027, after which the Chinese-Kenyan consortia will operate the highway as a toll road for 28 years to recover their investment and earn a return.
Beijing changes approach in Africa
The agreement revives China’s infrastructure drive in Africa after a sharp pullback around 2019, when concerns over “debt-trap diplomacy” prompted Beijing to slow lending. Last year’s China-Africa summit saw President Xi Jinping pledge USD 50 billion in fresh financing and investment over three years, with greater emphasis on risk-sharing and equity stakes.
For Kenya, the Chinese deal came after the government scrapped a previous contract with a French-led group headed by Vinci SA earlier this year. The European consortium had been selected in 2022 but negotiations stalled over financing terms and timelines.
The new partnership was sealed during President Ruto visit to Beijing in April – his third trip to China since taking office in 2022. While there, he stressed Kenya’s need to tap fast-growing markets like China to boost exports of tea, coffee, avocados and cut flowers.
Tensions with Washington
The deepening engagement with Beijing has, however, irritated Washington. Kenya remains one of America’s closest allies on the continent, hosting United States military facilities and receiving significant security assistance. The incoming Trump administration viewed the highway award as a setback for Western influence, and in response cancelled a USD 60 million United States-funded bus rapid transit project in Nairobi that had been agreed under President Biden.
Ruto pushed back publicly. “We are not choosing sides; we are choosing development for Kenya,” he posted on social media, insisting the country would work with any partner willing to deliver infrastructure quickly and on viable terms.
What it means for Kenyans
Analysts say the project underscores a broader trend: African governments, squeezed by high debt and slow disbursement from traditional Western lenders, are increasingly open to Chinese proposals that blend loans, equity and long concession periods.
For ordinary Kenyans, the promise is tangible – shorter journey times, fewer accidents and lower transport costs on a highway notorious for gridlock and deadly crashes. Yet questions linger over future toll rates and whether the 28-year concession might limit the government’s future options.
Environmental groups have also called for stronger safeguards, warning that widening the road through the Rift Valley could disrupt wildlife migration routes.
As bulldozers rolled in on Friday, the mood among officials was one of cautious optimism. With national elections looming in 2027 – the same year the expanded highway is due to open fully – President Ruto is banking on visible progress to bolster his legacy. For now, Kenya’s bet is on Chinese expertise and a new financing playbook to deliver one of the country’s biggest infrastructure upgrades in decades.
Agencies contributed to this report
