East Africa's ambitious railway faces project risks
Friday, July 10, 2015
Subject
Outlook for East Africa's standard-gauge railway.
Significance
On June 26, construction began on Uganda's branch of the East African standard-gauge railway, the region's largest-ever transport infrastructure venture. The project sits at the heart of regional integration plans and seeks to link up all major urban centres, from Mombasa and Nairobi in Kenya, to Kampala in Uganda, Kigali in Rwanda and Bujumbura in Burundi.
Impacts
- Construction delays may occur due to slow disbursement of Chinese funds, as has been the experience across the continent.
- Financing will take place via bilateral loans rather than the more multilateral, transparent forms that China is diversifying towards.
- Conditional Chinese loans that specify the construction company for the contract raise political risk for Chinese firms.
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