MOMBASA (Reuters) - Kenya on Saturday inaugurated the first part of a new container terminal at Mombasa which is expected to boost by 50 percent the volume of cargo handled by East Africa’s largest seaport.
Construction of the 30 billion shilling ($296.74 million)terminal began in March 2012 and was completed in February this year.
The project was financed by a loan from Japan through the Japan International cooperation agency (JICA), and Kenya will repay the loan over a 40-year period.
A gateway to East and Central Africa, the Indian Ocean port funnels imports of fuel and consumer goods as well as exports of tea and coffee from landlocked neighbors such as Uganda and Rwanda.
President Uhuru Kenyatta, who opened the facility, said the terminal heralded “a whole new era in the development of our ports and facilitation of the region’s international trade”.
A bigger cargo capacity for Mombasa was crucial because of the discovery of oil and gas in the region, he said.
British explorer Tullow Oil and partner Africa Oil discovered oil in Lokichar in northwest Kenya in 2012.
Recoverable reserves are an estimated 750 million barrels of crude and commercial production is expected to commence in 2017.
Uganda also has confirmed crude reserves while Kenya’s other neighbor Tanzania has huge gas discoveries.
The new terminal can handle 550,000 twenty foot equivalent units (TEUs) per year and will ramp up Mombasa’s existing annual cargo handling capacity from 1.05 million TEUs to 1.6 million TEUs.
“In five years’ time, we expect to have hit 2.5 million TEUs after completing the second phase,” Kenya’s finance minister, Henry Rotich, said.
He added the country had already signed an agreement with JICA for credit worth 32 billion shillings to fund construction of the new terminal’s second part.
1 = 101.1000 Kenyan shillings)
Editing by Elias Biryabarema and Angus MacSwan