Kenya plans to borrow $328 million to finance Mombasa port expansion

Kenya plans to borrow $328 million to finance Mombasa port expansionThe Kenya Ports Authority plans to borrow 34 billion shillings ($328 million) to finance the expansion of East Africa’s biggest harbor on the southeast coast, Managing Director Gichiri Ndua said.

The port handles fuel, consumer goods and other imports for Uganda, Burundi, Rwanda, South Sudan, Democratic Republic of Congo and Somalia, as well as regional tea and coffee exports.

Officials said the loans would support the purchase of cargo handling equipment, help finance a brand new container terminal and complete the underway construction of another terminal.

The expansion will enable the port to handle 450,000 more containers, lifting overall capacity to “slightly above 2 million” 20-foot equivalent units, or TEUs, when it is completed in 2022, Ndua said.

“We will raise the money in soft loans from international development partners,” he said, declining to provide further details on financing.

The Kenyan port is facing increased competition from neighboring Tanzania, which is expanding its port at Dar es Salam and plans to spend $11 billion on a new port at Bagamoyo.

Container traffic through the port reached about one million twenty TEUs in 2014, up 11.9 percent on a year earlier. The port management said it expected a 30 percent increase to 1.3 million TEUs in 2015.

Kenya has long had plans for a second container port further north on its coast, in the Lamu area, but the project has faced repeated delays

The country’s economy, the largest in East Africa, is expected to grow 6 percent this year, compared with 5.3 percent in 2014, according to the country’s Treasury.