GILGIL, Kenya, Nov 28 (Reuters) - Kenya and two Chinese state firms launched construction of a $1.5 billion highway expansion on Friday, marking Beijing's return to major infrastructure development in the East African economy after a years-long hiatus. The project, split into two phases, will be financed by the partners through a mix of debt and equity using a model that is gaining traction after China's traditional lending model raised concerns over borrowers' debt burdens.
Kenya terminated a deal with a consortium led by France's Vinci SA
for the highway expansion project earlier this year. The new
was announced during a state visit by Ruto to Beijing in April.
One phase of the highway project will cost $863 million and see China Road and Bridge Corporation partner with Kenya's state pension fund NSSF to expand two existing stretches of a single-lane, 139-kilometre (86-mile) highway into four- and six-lane dual-carriage roads, the Kenya National Highways Authority said. In the second phase, Shandong Hi-Speed Road and Bridge International, a subsidiary of China's Shandong Hi-Speed Group, will develop an existing single-lane, 94-kilometre stretch of highway into a six-lane carriageway at a cost of $678.56 million.
