China has signed a deal to build a $3.8bn railway link between Kenya's Indian Ocean port of Mombasa and Nairobi, the first stage of a line that will eventually link neighboring Uganda, Rwanda, Burundi and South Sudan.
The agreement was signed in Nairobi on Sunday by visiting Chinese premier Li Keqiang and witnessed by the presidents of Kenya, Uganda, Rwanda and South Sudan,
Under the terms of the deal, Exim Bank of China will provide 90 percent of the cost to replace the crumbling British colonial-era line with a 609km standard-gauge link, and Kenya the remaining 10 percent.
Construction is due to start in October and will take three-and-a-half years to complete, with China Communications Construction as the main contractor, the AFP news agency reported.
Once the Mombasa-Nairobi line is completed, construction would begin to link east Africa's largest economy with Kampala, Kigali, Bujumbura and Juba - capitals of Uganda, Rwanda, Burundi and South Sudan.
"This project demonstrates that there is equal cooperation and mutual benefit between China and the East African countries, and the railway is a very important part of transport infrastructure development," Li, who is on a four-nation tour of African countries, said.
Li's visit, his first to the continent since taking office last year, has taken him to Ethiopia, Nigeria and Angola.
In March 2013, Chinese President Xi Jinping signed a string of deals during a visit to the Republic of Congo. Xi also visited Tanzania and South Africa.
China, the world's second-biggest economy, is keen to boost its presence on the continent to find new markets and opportunities.
Uhuru Kenyatta, the Kenyan president, hailed the booming relationship with China, calling it one "based on mutual trust" and saying Kenya "has found an honourable partner in China".
At the same event, Ugandan president Yoweri Museveni took an apparent swipe at Western donors who have been critical of his leadership - including government corruption and his recent signing of anti-gay legislation.
"We are happy to see that China is concentrating on the real issues of development," Museveni said.
"They don't give lectures on how to run local governments and other issues I don't want to mention."