Government Allocates Sh41 Billion for Major Mombasa Port Expansion to Meet Growing Demand

Kenya’s government has committed Sh41 billion toward a comprehensive expansion of the Port of Mombasa as cargo volumes surge beyond current infrastructure capacity, positioning the facility to handle projected growth that could see throughput reach 2.4 million Twenty-foot Equivalent Units this year.

President William Ruto announced the substantial investment during the launch of a commuter rail service in Mombasa, emphasizing the critical need to align port infrastructure with rapidly expanding cargo demands.

The expansion comes as the port is projected to handle over 2.4 million Twenty-foot Equivalent Units (TEUs) this year, up from two million TEUs at the end of 2024.

The ambitious project will involve constructing a new cargo yard at the Mombasa port beginning at year’s end, designed to accommodate the increasing volume of goods flowing through East Africa’s premier maritime gateway.

This development represents a significant scaling up from the total container capacity for both container terminals one and two at the port of Mombasa stands at 2.1 million TEUs currently.

“We need to match cargo capacity and the infrastructure; that is why we shall be investing more in different port projects in the coming years,” President Ruto stated during the announcement, underscoring the government’s recognition that port limitations could constrain regional trade growth.

The expansion initiative has already begun with China Communications Construction Company (CCCC) mobilizing to the site to demolish the decommissioned Kipevu Oil Terminal.

This demolition work paves the way for a major infrastructure upgrade, as the old terminal was retired following the completion of Kipevu Oil Terminal 2 approximately two years ago.

The newer facility boasts enhanced capacity to simultaneously handle four vessels, demonstrating the scale of modernization taking place.

Kenya Ports Authority Managing Director William Ruto outlined plans to expand Terminal 19, which will add more than 450 million TEUs of capacity through sea reclamation once the demolition phase concludes.

This expansion represents one of the most significant infrastructure developments at the port in recent years.

Beyond physical expansion, the port authority is collaborating with Container Freight Station owners to modernize their facilities, addressing a capacity bottleneck that has remained static for two decades despite consistent increases in cargo flow.

“Apart from port expansion, we are working with other stakeholders, including CFSs, to expand their facilities to accommodate increasing cargo throughput in the country,” the KPA Managing Director explained.

The port’s performance metrics illustrate the urgency behind these investments.

Last year, Mombasa handled approximately 2.1 million TEUs, with in-transshipment traffic recording 491,666 TEUs—reflecting a remarkable 132.9 percent increase equivalent to 280,593 additional TEUs compared to 2023 figures.

The expansion strategy extends beyond immediate port infrastructure to encompass broader economic development initiatives.

President Ruto revealed that the government has partnered with the African Export-Import Bank (Afreximbank) to finance various projects surrounding the port, including the strategically important Dongo Kundu Special Economic Zone.

This collaboration aims to support trade facilitation and attract trade-related investments to Kenya.

Afreximbank has ratified multiple initiatives designed to advance Kenya’s industrialization and export-led development agenda by funding the Dongo Kundu, Naivasha, and Vipingo Special Economic Zones.

Under these arrangements, Afreximbank will finance the development and execution of industrial parks and special economic zones through its affiliate company, Arise Integrated Industrial Platforms.

These proposed industrial parks are designed to create sustainable environments where export-oriented industries can flourish by leveraging economies of scale, shared infrastructure, and enhanced access to global markets.

The three Special Economic Zones form part of Kenya’s fourth medium-term plan spanning 2023-2027 within the broader Vision 2030 framework, intended to accelerate Kenya’s capacity to export value-added goods both within Africa and globally.

The Sh41 billion allocation comes as part of Kenya Ports Authority’s broader Sh310 billion ports investment program, demonstrating the government’s commitment to maintaining Mombasa’s position as East Africa’s primary trade gateway.

Recent infrastructure investments have already included new gantry cranes worth $31.5 million (Sh4.1 billion) as part of its efforts to strengthen its operations, acquired in 2024.

The expansion project positions Kenya to capitalize on growing regional trade volumes while addressing capacity constraints that could otherwise limit economic growth.

With construction of the new yard scheduled to begin before year-end, the project represents a critical investment in Kenya’s trade infrastructure that will serve the broader East African region’s commercial needs for decades to come.

The timing of this investment aligns with Kenya’s broader infrastructure development initiatives and reflects the government’s strategy to position the country as a regional hub for trade and manufacturing.

As cargo volumes continue their upward trajectory, the Mombasa port expansion will be essential for maintaining Kenya’s competitive advantage in regional maritime trade.