China has agreed to fund Kenya’s Standard Gauge Railway (SGR) line extending to Kisumu County.

During a bilateral meeting between China’s President Xi Jinping and his Kenyan counter path President Uhuru Kenyatta, the Asian nation agreed to fund half the cost of the the construction of the Phase 2B of the Standard Gauge Railway between Naivasha and Kisumu in a bid to slow down Kenya’s rising debt burden.

“The Naivasha-Kisumu phase of the SGR will cost $3.8 billion. And owing to its regional significance, I would request that 50% of its cost be provided as part of grant financing,” said President Kenyatta.

The meeting, the third on Chinese soil, was expected to secure financing deals for infrastructure.

Upon agreement, the whole Mombasa-Nairobi-Kisumu railway line when complete will make Kenya have $7 billion of Chinese debt which is a decrease from the initial $43 billion.

“The SGR sits very well on the Belt and Road Initiative. It commences the envisaged land bridge between the Indian and Atlantic Oceans, opening up the interior for trade and investment across seven countries, and opening China who are our largest multilateral lender to Kenya, accounting for about half of Kenya multilateral debt to Central Africa, and further on, beyond the Atlantic Ocean,” said the president.

China is currently financing Section 2A SGR line from Nairobi to Naivasha that is currently under construction valued at Sh150 billion.

The Standard Gauge Railway, whose first phase from Mombasa to Nairobi was completed last year at a cost of $3.2 billion, is supposed to pass through Kenya, Uganda, Rwanda and the DRC. It is also part of China’s long-term vision to access resources in the interior of Africa.