Construction of the second phase of a modern container terminal at Kenya’s port of Mombasa is set to start in January as the country seeks to cement its position as East Africa’s transport and logistics hub.

This comes after the Kenya Ports Authority (KPA) secured a $333.7-million loan from the Japan International Cooperation Agency.

The Phase II project, which forms part of the broader Mombasa port upgrade and modernisation programme, which is estimated to cost a staggering $900-million, is aimed at transforming the port into a modern facility capable of serving not only Kenya but also the rest of the East African region.

When completed, the terminal will have a total capacity of 1.5-million twenty-foot-equivalent units (TEUs) a year.

KPA MD Catherine Mturi-Wairi says the authority has embarked on the tendering process for Phase II, which involves the construction of Berth 22.

“We have secured financing from the Japanese government and are now in the tendering process, with plans to break ground in January 2018,” she says.

When completed, Phase II will provide additional capacity of 450 000 TEU/y.

An envisaged third phase, which will involve the construction of Berth 23, will increase capacity by a further 500 000 TEU/y.

According to Mturi-Wairi, the commissioning of the 550 000-TEU/ Phase I of the container terminal in September last year has significantly enhanced the competitiveness of the port. Last year, the port handled 27.3-million tons of cargo, compared with 26.7-million tons in 2015. Further, container traffic increased from 1.08-million TEUs in 2015 to 1.09-million TEUs in 2016.

“To remain responsive to maritime trends, we continue to implement an elaborate port modernisation programme to position the Port of Mombasa as a world-class port,” Mturi-Wairi says.

Besides investing in new berths, the KPA plans to build a bigger oil terminal to replace the existing Kipevu oil terminal.

The new terminal, incorporating a liquefied petroleum gas pipeline, will be able to handle four vessels at a time. It will also have pipes running on the seabed linking it with Kenya Pipeline Company’s storage tanks.