Four years into President William Ruto’s administration, the long-delayed Standard Gauge Railway (SGR) extension to western Kenya has finally moved from promise to construction, reviving a project stalled for years over financing.
The Naivasha-Kisumu-Malaba railway is being presented as the missing link in Kenya’s SGR network, connecting the existing line from Mombasa to Naivasha with Uganda and, eventually, a wider East African rail network.
But with the project carrying an estimated price tag of about Sh700 billion, the central question is whether the western extension can generate enough economic activity and freight business to justify the enormous investment.
From stalled project to construction
The project has been on Kenya’s infrastructure agenda for more than a decade.
The SGR was originally intended to run from Mombasa through Nairobi and Naivasha to Kisumu and eventually Malaba, before linking with Uganda and other landlocked markets.
The western extension, however, stalled after Chinese financing for the remaining sections failed to materialise.
Work on the SGR stopped at Naivasha in 2019, leaving the railway short of Kenya’s western border and the Ugandan frontier.
Ruto revived the project after taking office, promising to complete the missing section.
In November 2025, he announced that construction from Naivasha to Kisumu and onward to Malaba would begin in January 2026, describing the project as necessary to “close the loop” and position Kenya at the centre of East Africa’s transport and logistics network.
"We shall extend the Standard Gauge Railway from Naivasha to Kisumu and onward to Malaba, closing the loop, connecting the region, and positioning Kenya as the heart of East Africa’s transport and logistics system,” Ruto stated at the time.
The January deadline slipped, but the project eventually reached the groundbreaking stage.
Ruto launched the Naivasha section at Suswa in Narok County on March 19, 2026, while two days later he joined Ugandan President Yoweri Museveni in Kisumu to launch the Kisumu-Malaba section.
Kenya Railways subsequently confirmed that actual construction works had commenced in Narok in July.
According to the Ministry of Roads and Transport, the project comprises a 264-kilometre Naivasha-Kisumu main line, an 8.69-kilometre branch to the proposed Kisumu Port, and a 107-kilometre Kisumu-Malaba section.
The financing question
The project’s revival has also come with a shift in how Kenya intends to finance the railway.
Unlike the earlier SGR sections, which were largely built with Chinese loans, the Naivasha-Kisumu-Malaba extension is being pursued through a more diversified financing model.
The government is looking to combine domestic revenue streams, including the Railway Development Levy, with infrastructure bonds and other alternative sources of capital.
“We do have a clear programme, and we are consulting development partners on some of the financial closures that we need to finish to fund this infrastructure. The project is not cheap,” Transport CS Davis Chirchir revealed last year.
The approach forms part of a broader effort by the Ruto administration to reduce reliance on conventional external borrowing and mobilise private and domestic capital for large infrastructure projects.
Ruto has argued that Kenya must explore innovative financing, including public-private partnerships, rather than continue relying on unsustainable borrowing.
“We cannot continue funding essential infrastructure through unsustainable borrowing and burdening taxpayers with additional taxes. But neither can we afford to postpone these imperatives without risking our future. There is a need to be innovative in the use of our national revenues or the national revenues at our disposal,” he remarked in November last year during the State of the Nation address.
The newly established National Infrastructure Fund is part of that broader financing architecture.
Parliament argues that the Fund is intended to mobilise capital from non-traditional sources and shift infrastructure financing towards an investment-led model, with transport among the sectors it can support.
What is the economic case?
The government’s argument rests largely on freight.
The railway will connect the Port of Mombasa to western Kenya, Uganda and, potentially, markets in Rwanda, South Sudan, Burundi and the Democratic Republic of Congo.
Uganda is particularly important. The country accounts for about 70 per cent of transit cargo passing through the Port of Mombasa, according to the Northern Corridor Transit and Transport Coordination Authority.
At the March launch, Ruto argued that logistics costs account for between 30 and 40 per cent of the cost of goods in the region. He projected that shifting cargo from road to rail could reduce freight costs by at least 40 per cent.
“Cargo that takes up to 100 hours to reach Kampala from Mombasa will be moved much faster once the line is complete, with freight costs projected to drop by at least 40 per cent,” he said.
For western Kenya, the expected benefits extend beyond transit cargo.
During the launch, Ruto outlined a broader economic vision anchored on the railway corridor, including the development of industrial parks, logistics hubs and special economic zones in key towns along the route such as Naivasha and Kisumu.
He said the line will facilitate the movement of agricultural produce, including tea, dairy, grains and fish, from western Kenya to local and international markets, while enabling manufacturers to access inputs more affordably and expand their reach.
The President also said the project will create employment opportunities for young people in construction, logistics, manufacturing and services, while strengthening trade ties within the EAC region.
The Uganda connection
The western SGR only makes its full regional case if Uganda completes its own connection from Malaba to Kampala.
That side of the railway is also moving forward, although financing remains a challenge.
Uganda is pursuing funding for its approximately 272-kilometre Malaba-Kampala section, while the Islamic Development Bank has approved a financing package for the project.
The two countries ultimately envisage a railway network extending beyond Uganda towards the Democratic Republic of Congo, Rwanda, Burundi and South Sudan.
Ruto has therefore tied the Kenyan extension to a broader regional ambition: turning the Northern Corridor into a rail-based trade route linking the Indian Ocean to landlocked markets.
What remains to be proved
The revival is significant, but construction itself does not guarantee economic success.
The original SGR has faced questions over its financial sustainability, with analysts arguing that its viability depends heavily on expanding freight volumes and extending the railway into regional markets.
The western extension is intended to address precisely that weakness by taking the railway closer to Uganda and its trading partners.
There are also immediate implementation challenges, including land acquisition and compensation. Kenya Railways and the National Land Commission have been working to identify affected parcels, with more than 3,500 landowners expected to require compensation.
The government now faces a race between construction, financing costs and the projected economic benefits.
Ruto’s record on the SGR extension can therefore be summed up in one development: a project that spent years stalled at Naivasha is finally moving west.
The bigger test for the remaining years of his administration will be whether that railway becomes more than a completed line — and delivers the cheaper freight, stronger regional trade, industrial growth and revenue needed to make a Sh700 billion bet pay off.
