Kenya is laying the groundwork for a new railway under the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor. The aim is to complement road transport and boost freight movement from Lamu Port to inland and regional markets.
The LAPSSET Corridor Development Authority says the planned Standard Gauge Railway is now in the planning and feasibility stage. That phase will inform investment decisions and next steps.
Why the LAPSSET railway matters for freight
The authority says rail can carry far more cargo than trucks. It argues the shift could reduce freight costs and improve regional trade links.
Rail is seen as a high-capacity option for moving goods in bulk. It is also expected to ease pressure on highways by shifting heavy loads off the roads.
A 3,000km SGR with three branches
The project is planned as a 3,000-kilometre Standard Gauge Railway, or SGR, a modern rail system built to a standard track width to improve speed and capacity.
The route would connect Lamu Port to Isiolo. From there, it would branch into three corridors to Addis Ababa, Juba and Nairobi.
The price tag and the investment case
Kenya Railways estimates the 544.4-kilometre SGR link between Lamu Port and Isiolo will cost at least $3.49 billion, which is also cited as Sh449.9 billion.
A further $3.17 billion, cited as Sh408.6 billion, is projected to connect to Ethiopia.
The authority says the project is viable, citing an economic internal rate of return of more than 12 per cent. Internal rate of return is a measure used to estimate a project’s expected profitability.
Lamu Port growth adds momentum
Lamu Port is planned for 23 berths, with three operational. It is designed to handle more than 20 million tonnes of cargo annually at full development.
The authority says integrated road links and future rail links could cut transit times to northern Kenya and neighbouring markets by more than half.
Lamu recorded its highest performance growth in 2025, handling 799,161 metric tonnes. That was up from 74,380 metric tonnes in 2024, driven by containerised cargo.
