The Cabinet Secretary for Roads and Transport, Davis Chirchir, witnessed the signing of an addendum to the commercial contract for the Naivasha–Kisumu Standard Gauge Railway (SGR) Phase 2B.

According to an X post on Tuesday, December 16, 2025, Kenya Railways Managing Director Philip Mainga and Yu Xiao Dong of China Communications Construction Company signed the addendum, reflecting the government’s strategy to fund the project through alternative financing mechanisms.

The addendum allows the project to be funded by securitising a portion of the Railway Development Fund. CS Chirchir said the move demonstrates the government’s commitment to developing strategic transport infrastructure while maintaining fiscal discipline.

“The alternative financing model will support faster implementation, better project sequencing, and stronger oversight. It also improves risk-sharing between the public sector and private partners,” the post reads.

Once completed, the Naivasha–Kisumu SGR will improve regional connectivity and lower transport and logistics costs along Kenya’s Western Corridor. The project is expected to boost trade and economic integration, connecting Western Kenya to the rest of the country more efficiently.

The addendum comes a day after the Cabinet approved two major national funds as part of the government’s long-term development strategy. On December 15, 2025, the Cabinet endorsed the National Infrastructure Fund (NIF) and the Sovereign Wealth Fund (SWF) under the Ksh5 trillion national development plan.

Kenya launches mega funds

The National Infrastructure Fund will mobilise domestic resources, monetise mature public assets, and attract private sector investment. Privatisation proceeds will be ring-fenced and invested in infrastructure projects that generate long-term value.

Each shilling invested through the fund is expected to leverage up to ten shillings from long-term investors, including pension funds, private equity funds, sovereign partners, and development finance institutions.

The Sovereign Wealth Fund will manage revenues from mineral and petroleum resources, dividends from public investments, and a portion of privatisation proceeds. Its focus will be on inter-generational savings, protection against external shocks, and strategic investments that deliver commercial returns.

Together, the NIF and SWF will support Kenya’s wider transformation agenda. Plans include modern irrigation, energy expansion, upgrading roads and highways, and extending the SGR to Malaba. The government also aims to modernise ports and airports, and increase energy generation by 10,000 megawatts over seven years through geothermal, hydro, solar, wind, and nuclear power.

President William Ruto defended the development strategy, saying it was realistic and necessary for growth. He highlighted the government’s plan to build 28,000 kilometres of roads by 2032, in addition to the 10,000 kilometres constructed under the previous administration.

Some lawmakers, including Kiharu MP Ndindi Nyoro, have called for accountability on previously borrowed funds before launching new projects. They argue that Kenyans deserve clarity on money already spent on infrastructure.