SGR Extension: Kenya Seeks to Sell 2% Import Levy, Raise KSh 516.8b from Etihad Rail
- The government maintained plans to extend the Standard Gauge Railway (SGR) from Naivasha to Malaba
- Transport Cabinet Secretary (CS) Davis Chirchir revealed plans to raise KSh 516.8 billion for the project through the securitisation of the 2% railway development levy
- According to the Associate Director at Deloitte Kenya Fred Kimotho, securitisation refers to when an organisation uses its assets as security to raise funds
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Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.
President William Ruto's administration is seeking to raise KSh 516.8 billion for the extension of the Standard Gauge Railway (SGR) from the sale of the 2% Railway Development Levy charged on imports.
Source: Twitter
Transport Cabinet Secretary (CS) Davis Chirchir revealed that the money will be raised through the securitisation of the 2% levy on import value.
Why govt is securitising import levy?
According to the Associate Director at Deloitte Kenya, Fred Kimotho, securitisation refers to when an entity or institution uses its assets as security to raise funds for a certain project.
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"Securitisation is when you use your assets as security to gain funding for a certain project," Kimotho explained to TUKO.co.ke.
CS Chirchir said the government is securitising the 2% railway development levy to raise the required amount for the extension of the railway from Naivasha to Malaba.
According to Bloomberg, the $4 billion (KSh 516.8 billion) will be raised by the Etihad Rail, the United Arab Emirates (UAE) national railway company, which will run freight operations on the SGR line.
Chirchir revealed that the National Treasury raises about KSh 50 billion per year from the railway development levy.
The government intended to commence the $5 billion (KSh 646 billion) project, which is the largest infrastructure development in East Africa, since the completion of the Mombasa-Nairobi SGR line in 2019.
Other funding for SGR extension
In April 2025, President Ruto secured a deal during his visit to the People's Republic of China, seeking to extend the railway line beyond the Malaba border.
Ruto projected the extension of the SGR 2B and 2C to begin this year, noting that it will open up the country as the region's main economic hub.
The head of state sought to extend the SGR to extend the railway network to South Sudan, Ethiopia and the Democratic Republic of the Congo (DRC).
Which other asset did govt securitise?
Meanwhile, the government securitised KSh 7 from the Road Maintenance Levy (RML) to raise KSh 175 billion for infrastructure.
CS Chirchir said the money will help clear the backlog of pending bills in the roads sector.
Chirchir explained that more than 580 road projects across the country remained stalled, but through the securitisation of the fuel levy, the projects are being completed.
The government collects KSh 25 per litre of petrol and diesel as the Road Maintenance Levy (RML).
Proofreading by Jackson Otukho, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
