China and Kenya have signed agreements to construct a new East Africa railway line.

This would run from Mombasa to Nairobi and extend through South Sudan, as well as Uganda to Rwanda.

As part of the agreements, 90% cost of first stage of the new $3.8bn standard gauge line will be funded by China’s Eximbank and the main contractor work will be a subsidiary of China Communications Construction Co.

"The costs of moving our people and our goods… across our borders will fall sharply."

The remaining 10% equal to $560m for the project will be financed by the Kenyan Government.

Being built to replace a more than 100 years old narrow-gauge track, work on the new 610km stretch from the coast to Nairobi will begin in October and is scheduled for completion in early 2018.

Kenyan President Uhuru Kenyatta was quoted by media sources as saying: "The costs of moving our people and our goods… across our borders will fall sharply."

Chinese Prime Minister Li Keqiang said: "This project demonstrates that there is equal co-operation and mutual benefit between China and the East African countries, and the railway is a very important part of transport infrastructure development."

Work on the second part of the project with links to other countries in the region will be followed after the first phase is completed.