CAPE TOWN (Reuters) – East Africa needs to raise up to $25 billion, or nearly two-thirds of Kenya’s annual output, over the next decade to upgrade its railways to boost trade, a senior regional official said on Tuesday.
“We are talking about the railway master plan which is expected to consume between $20 and $25 billion,” said Alloys Mutabingwa, the East African Community’s (EAC) deputy secretary general for infrastructure and planning.
The EAC launched a common market in July, opening the borders of Uganda, Kenya, Tanzania, Rwanda and Burundi with a combined GDP of $75 billion, although poor roads and railways remain an impediment to greater trade.
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Mutabingwa said the EAC’s rail investment plan should be ready by the end of the year, after which governments would start mapping out a framework for public-private deals.
Work to upgrade existing railway lines or build new ones was likely to start in 2013, he added. New rail links would be built between inland countries and the ports of Dar es Salaam in Tanzania and Kenya’s Mombasa.
The African Development Bank was the lead financial advisor in the railway project and the EAC was exploring all options to raise the necessary capital, Mutabingwa said.
“We are looking at equity, raising capital on the debt markets, all these options will be explored,” he added.
Source: Reuters Image: Reuters