Kenya's President Uhuru Kenyatta inaugurated on Wednesday the second phase of the Standard Gauge Railway project (SGR), according to Reuters. The new Chinese-built railway line links Nairobi to Naivasha and is part of Kenya's largest infrastructure plan since its independence.

The new track will eventually lead to an inland container depot, from where containers will be distributed to Uganda and Rwanda, and South Sudan. Phase one, opened two years ago, links the port of Mombasa and Nairobi.

Both phases were financed by China Eximbank and built by Chinese companies, including the China Communications Construction Company, as part of the Belt & Road Initiative. In total, the two stretches mount up to 4.7 billion U.S. dollars, 3.2 U.S. billion for phase one and 1.5 billion U.S. dollars for the newly opened phase two.

The new line connects Nairobi to Naivasha, where a new industrial park in the Rift Valley is expected to be built. Despite the delay, the Naivasha industrial park intends to offer companies tax breaks for investing in manufacturing and preferential tariffs for electricity generated in the nearby geothermal fields.

Tourism and jobs

Speaking to CNN, Musembi Mumo, director of Kenya Railway, indicated that in the last two years the Mombasa and Nairobi connection has been operating on a daily schedule, registering two million passengers. "We are also targeting 10 million tons for cargo" per year, he added.

"We are hoping it will help the country's economy as it has done for phase one with tourism in Mombasa," Mumo told CNN, referring to the new line.

The governor of Nakuru county, which includes Naivasha, is also confident that the railway will encourage investments. "We have eight major companies who want to come set up here in Naivasha," said governor Lee Kinyanjui at the ceremony at the Mai Mahiu station. He didn't specify the name of the companies but added that the line will help boost the transport infrastructure in the region and lower costs for farmers.

The Chinese ambassador to Kenya, Wu Peng, said the Mombassa link has had a positive impact on the economy, in terms of tourism, investments, and communications. He also estimates that the Nairobi-Naivasha line will create more jobs. 

"We encourage Chinese enterprises to invest in the Naivasha ICD and the special economic zones," said the ambassador, quoted by Voice of America.

Creating infrastructure to attract investors 

According to a statement from Kenya's State House on Wednesday, the President opened the SGR line and two other key transport and trade infrastructure projects aimed at boosting the country's economy.

"Kenya is investing in modern infrastructure to attract investors who will, in turn, create the much-needed wealth and employment opportunities," he said at a stopover on Ngong SGR Station.

In his main speech, Kenyatta added that with the launch of phase two of the SGR and groundbreaking for the construction of the Inland Container Depot (ICD), the government had set the ball rolling for the development of a Special Economic Zone (SEZ) in Naivasha, using government and private sector resources.

For the construction of the ICD, a railway marshaling yard, and a logistics zone, the President indicated that it has already secured 6.9 billion Kenyan Shillings (around 66 million U.S. dollars).

Kenyatta pointed out that the first phase of the SGR had repositioned the port of Mombasa as a strategic seaport in the region. Besides, commissioning the 120 Kilometer Nairobi-Naivasha segment will spur economic activities and train services will stimulate tourism in the Great Rift Valley.