Kenya's Treasury has allocated Ksh 40.25 billion for Standard Gauge Railway (SGR) and Meter Gauge Railway (MGR) projects in the 2026/27 budget. The funds aim to enhance connectivity, goods movement and economic growth. Several projects, including SGR Phase 2B and 2C, are already underway.
In the 2026/27 budget summary, the transport sector received Ksh 51.78 billion, with Ksh 40.25 billion for SGR and MGR projects. The government expects the investments to bolster rail connectivity and economic growth amid public debt pressures and rising fuel costs.
Key allocations include Ksh 20.84 billion for SGR Phase 2B and 2C, covering 369 kilometres from Naivasha to Kisumu and Kisumu to Malaba, where construction works have already begun. Additionally, Ksh 2.25 billion targets land acquisition and public facilities under SGR Phase 1, while Ksh 828 million funds access roads to Suswa and Maai Mahiu stations.
Other initiatives feature Ksh 2.03 billion for the Riruta-Lenana-Ngong railway line to improve commuter transport in Nairobi, Ksh 616 million for 500 SGR flat wagons and 20 passenger coaches, and Ksh 2.76 billion for locomotive wheelsets. Ksh 450 million will install a modern SGR passenger ticketing system.
For MGR, Ksh 796 million goes to Longonot-Malaba Phase II and Ksh 1.39 billion to the Mombasa-Miritini link. Rehabilitation covers Nairobi-Nanyuki, Kisumu-Butere, Lesuru-Kitale and Gilgil-Nyahururu lines. The government also set aside Ksh 1.4 billion for the Voi-Taveta transhipment facility, Ksh 500 million for an Athi River logistics hub, and Ksh 2.39 billion for an SGR overhaul workshop.
